401(k) plan asset allocation, account balances, and … · 401(k) plan asset allocation, account...

A research report from the EBRI Education and Research Fund © 2017 Employee Benefit Research Institute

August 3, 2017 • No. 436

401(k) Plan Asset Allocation, Account Balances, and Loan

Activity in 2015

By Jack VanDerhei, EBRI; Sarah Holden, ICI; Luis Alonso, EBRI; and Steven Bass, ICI

A T A G L A N C E

The bulk of 401(k) assets were invested in stocks. On average, at year-end 2015, 66 percent of 401(k)

participants’ assets were invested in equity securities through equity funds, the equity portion of balanced

funds, and company stock. Twenty-seven percent was in fixed-income securities such as stable-value

investments, bond funds, and money funds.

More 401(k) plan participants held equities at year-end 2015 than before the financial market

crisis (year-end 2007), and most had the majority of their accounts invested in equities. For

example, about three-quarters of participants in their 20s had more than 80 percent of their 401(k) plan

accounts invested in equities at year-end 2015, up from less than half of participants in their 20s at year-end

2007. Overall, more than 90 percent of 401(k) participants had at least some investment in equities at year-end

2015.

Nearly 65 percent of 401(k) plans, covering nearly three-quarters of 401(k) plan participants,

included target-date funds in their investment lineup at year-end 2015. At year-end 2015, 20 percent

of the assets in the EBRI/ICI 401(k) database were invested in target-date funds and about half of 401(k)

participants in the database held target-date funds. Also known as lifecycle funds, these funds are designed to

offer a diversified portfolio that automatically rebalances to be more focused on income over time.

A majority of new or recent hires invested their 401(k) assets in balanced funds, including target-

date funds. For example, at year-end 2015, 70 percent of recently hired participants held balanced funds in

their 401(k) plan accounts. Balanced funds comprised 41 percent of the account balances of recently hired

401(k) participants at year-end 2015. A significant subset of that balanced fund category is invested in target-

date funds. At year-end 2015, 34 percent of the account balances of recently hired participants were invested in

target-date funds.

401(k) participants’ investment in company stock continued at historically low levels. Less than

7 percent of 401(k) assets were invested in company stock at year-end 2015, roughly the same share as in

2012, 2013, and 2014. This share has fallen by 63 percent since 1999 when company stock accounted for

19 percent of assets. Recently hired 401(k) participants contributed to this trend: they tend to be less likely to

hold company stock. At year-end 2015, about one-quarter of recently hired 401(k) plan participants in plans

offering company stock held company stock, compared with about 43 percent of all 401(k) participants.

401(k) participants were less likely to have loans outstanding at year-end 2015 than at year-end

2014. At year-end 2015, 18 percent of all 401(k) participants who were eligible for loans had loans outstanding

against their 401(k) plan accounts, down from 20 percent at year-end 2014. Loans outstanding amounted to

ebri.org Issue Brief • August 3, 2017 • No. 436 2

12 percent of the remaining account balance, on average, at year-end 2015, up 1 percentage point from year-

end 2014. Loan amounts also edged up a bit in 2015.

The year-end 2015 average 401(k) plan account balance in the database was 3.8 percent lower

than the year before, reflecting in large part the changing composition of the sample rather than

the experience of typical 401(k) participants in 2015. To understand changes in 401(k) participants’

average account balances, it is important to analyze a sample of consistent participants. For 401(k) participants

present in both 2014 and 2015, the average account balance increased by 3.1 percent. As with previous

EBRI/ICI updates, analysis of a sample of consistent 401(k) plan participants is expected to be published later

this year.

The average 401(k) plan account balance tends to increase with participant age and tenure. For

example, at year-end 2015, participants in their 40s with more than two to five years of tenure had an average

401(k) plan account balance of close to $35,000, compared with an average 401(k) plan account balance of

more than $280,000 among participants in their 60s with more than 30 years of tenure.


Jack VanDerhei is director of Research at the Employee Benefit Research Institute (EBRI). Sarah Holden is senior

director of Retirement and Investor Research at the Investment Company Institute (ICI). Luis Alonso is director of

Information Technology and Research Databases at EBRI. Steven Bass is an associate economist at ICI. This Issue Brief

was written with assistance from the Institute’s research and editorial staffs. Any views expressed in this report are

those of the authors, and should not be ascribed to the officers, trustees, or other sponsors of EBRI, EBRI-ERF, or their

staffs. Neither EBRI nor EBRI-ERF lobbies or takes positions on specific policy proposals. EBRI invites comment on this

research.

Suggested citation: Jack VanDerhei, Sarah Holden, Luis Alonso, and Steven Bass. “401(k) Plan Asset Allocation,

Account Balances, and Loan Activity in 2015.” EBRI Issue Brief, no. 426, and ICI Research Perspective, Vol. 23, no. 6

(August 2017).

Copyright Information: This report is copyrighted by the Employee Benefit Research Institute (EBRI) and by the

Investment Company Institute (ICI). It may be used without permission but citation of the source is required.

Report availability: This report is available on the Internet at www.ebri.org and at www.ici.org

Since 1996, the Employee Benefit Research Institute (EBRI) and the Investment Company Institute (ICI) have worked

together on collecting and analyzing annual data on millions of 401(k) plan participants’ accounts. This report reflects

the year-end 2015 update of these data and EBRI’s and ICI’s ongoing research into 401(k) plan participants’ activity.

Table of Contents Introduction .......................................................................................................................................................... 7

EBRI/ICI 401(k) Database ...................................................................................................................................... 7

Sources and Types of Data ................................................................................................................................. 7

Investment Options ........................................................................................................................................... 7

About the EBRI/ICI Database ................................................................................................................................. 8

Distribution of Plans, Participants, and Assets by Plan Size .................................................................................... 8

About Changes in Account Balances ...................................................................................................................... 10

Relationship of EBRI/ICI 401(k) Database Plans to the Universe of All 401(k) Plans .............................................. 10

Age and Tenure of 401(k) Plan Participants ....................................................................................................... 10

Year-End 2015 Snapshot of 401(k) Participants’ Account Balances .......................................................................... 10

Factors That Affect 401(k) Participants’ Account Balances ................................................................................... 10

Definition of 401(k) Plan Account Balance .......................................................................................................... 13

Size of 401(k) Plan Account Balances .................................................................................................................... 13

Relationship of Age and Tenure to 401(k) Plan Account Balances ........................................................................ 13

Relationship Between 401(k) Plan Account Balances and Salary .......................................................................... 17

Year-End 2015 Snapshot of 401(k) Participants’ Asset Allocation ............................................................................. 17

Changes in Asset Allocation Between Year-End 2014 and Year-End 2015 ............................................................. 21

Asset Allocation and Participant Age .................................................................................................................. 21

Asset Allocation and Investment Options ........................................................................................................... 21

Asset Allocation by Investment Options and Age, Salary, and Plan Size ................................................................ 21

Distribution of Equity Fund Allocations and Participant Exposure to Equities ......................................................... 23

Asset Allocation to Equity Funds .................................................................................................................... 23

Asset Allocation of 401(k) Plan Participants Without Equity Funds .................................................................... 28

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Asset Allocation to Equities ........................................................................................................................... 28

Changes in Concentrations in Equities Since the Financial Crisis ....................................................................... 28

Distribution of 401(k) Participants’ Balanced Fund Allocations by Age .................................................................. 28

Distribution of 401(k) Participants’ Company Stock Allocations ............................................................................ 31

Asset Allocations of Recently Hired Participants .............................................................................................. 31

Year-End 2015 Snapshot of 401(k) Plan Loan Activity ............................................................................................. 35

Availability and Use of 401(k) Plan Loans by Plan Size ........................................................................................ 35

401(k) Plan Loan Activity Varies with Participant Age, Tenure, Account Balance, and Salary .................................. 35

Average Loan Balances .................................................................................................................................... 35

References ......................................................................................................................................................... 499

Endnotes .......................................................................................................................................................... 555

Figures

Figure 1, 401(k) Plan Characteristics, by Number of Plan Participants, 2015 ............................................................... 9

Figure 2, Distribution of 401(k) Plans, Participants, and Assets ................................................................................ 9

Figure 3, 401(k) Plan Characteristics, by Plan Assets, 2015 ....................................................................................... 9

Figure 4, EBRI/ICI 401(k) Database Represents a Wide Cross Section of the 401(k) Universe ................................... 11

Figure 5, 401(k) Participants Represent a Range of Ages ........................................................................................ 12

Figure 6, 401(k) Participants Represent a Range of Job Tenures ............................................................................ 12

Figure 7, Domestic Stock and Bond Market Indexes ............................................................................................... 14

Figure 8, Percent Change in Total Return Indexes .................................................................................................. 14

Figure 9, Snapshot of Year-End 401(k) Plan Account Balances ................................................................................ 15

Figure 10, Distribution of 401(k) Plan Account Balances, by Size of Account Balance ............................................ 16

Figure 11, Age Composition of Selected 401(k) Plan Account Balance Categories ................................................. 16

Figure 12, Tenure Composition of Selected 401(k) Plan Account Balance Categories ................................................. 18

Figure 13, 401(k) Plan Account Balances Increase With Participant Age and Tenure ................................................. 18

Figure 14, 401(k) Plan Account Balances Less Than $10,000, by Participant Age and Tenure .................................... 19

Figure 15, 401(k) Plan Account Balances Greater Than $100,000, by Participant Age and Tenure .......................... 19

Figure 16, Median 401(k) Plan Account Balance Among Longer-Tenured Participants, by Age and Salary, 2015 .......... 20

Figure 17, Ratio of 401(k) Plan Account Balance to Salary, by Participant Age and Tenure ..................................... 20

Figure 18, Ratio of 401(k) Plan Account Balance to Salary for Participants in Their 20s, by Tenure....................... 22

Figure 19, Ratio of 401(k) Plan Account Balance to Salary for Participants in Their 60s, by Tenure....................... 22

Figure 20, 401(k) Plan Assets Are Concentrated in Equities ..................................................................................... 23


Figure 21, Average Asset Allocation of 401(k) Plan Accounts, by Participant Age ...................................................... 24

Figure 22, Distribution of 401(k) Plans, Participants, and Assets, by Investment Options, 2015 ................................. 24

Figure 23, Average Asset Allocation of 401(k) Plan Accounts, by Participant Age and Investment Options .................. 25

Figure 24, Average Asset Allocation of 401(k) Plan Accounts, by Participant Salary and Investment Options ............... 26

Figure 25, Average Asset Allocation of 401(k) Plan Accounts, by Plan Size and Investment Options ........................... 27

Figure 26, Asset Allocation Distribution of 401(k) Participant Account Balance to Equity Funds, by Participant Age ...... 27

Figure 27, Asset Allocation Distribution of 401(k) Participant Account Balance to Equity Funds, by Participant Age,

Tenure, or Salary .................................................................................................................................... 29

Figure 28, Percentage of 401(k) Plan Participants Without Equity Fund Balances Who Have Equity Exposure, by

Participant Age or Tenure, 2015 ............................................................................................................... 29

Figure 29, Average Asset Allocation for 401(k) Plan Participants Without Equity Fund Balances, by Participant Age or

Tenure ................................................................................................................................................... 30

Figure 30, Asset Allocation to Equities Varied Widely Among 401(k) Plan Participants ............................................... 32

Figure 31, Exposure to Equities Increased Among 401(k) Participants Between 2007 and 2015 ................................. 32

Figure 32, Asset Allocation Distribution of 401(k) Participant Account Balance to Balanced Funds, by Age .................. 33

Figure 33, Asset Allocation Distribution of 401(k) Participant Account Balance to Balanced Funds, by Tenure ............. 34

Figure 34, Asset Allocation Distribution of 401(k) Participant Account Balance to Company Stock in 401(k) Plans With

Company Stock, by Participant Age .......................................................................................................... 35

Figure 35, Many Recently Hired 401(k) Plan Participants Hold Balanced Funds ......................................................... 35

Figure 36, Many Recently Hired 401(k) Plan Participants Hold Target-Date Balanced Funds ...................................... 37

Figure 37, Many Recently Hired 401(k) Participants Hold High Concentrations in Balanced Funds .............................. 38

Figure 38, Many Recently Hired 401(k) Participants Hold High Concentrations in Target-Date Funds .......................... 40

Figure 39, Asset Allocation Distribution of 401(k) Plan Account Balance to Balanced Funds Among Recently Hired

Participants, by Participant Age ................................................................................................................ 41

Figure 40, Average Asset Allocation of 401(k) Plan Accounts, by Participant Age Among Recently Hired 401(k) Plan

Participants With Two or Fewer Years of Tenure ....................................................................................... 42

Figure 41, Recently Hired 401(k) Participants Tend to Be Less Likely to Hold Company Stock ...................................... 42

Figure 42, New 401(k) Participants Tend Not to Hold High Concentrations in Company Stock ................................ 43

Figure 43, Asset Allocation Distribution of Recently Hired 401(k) Participant Account Balance to Company Stock in

401(k) Plans With Company Stock, by Participant Age ............................................................................... 43

Figure 44, Percentage of 401(k) Plans Offering Loans, by Plan Size, 2015 ............................................................ 44

Figure 45, Percentage of Eligible 401(k) Plan Participants With 401(k) Plan Loans, by Plan Size, 2015 ................... 44


Figure 46, 401(k) Loan Balances as a Percentage of 401(k) Plan Account Balances for Participants With 401(k)

Loans, by Plan Size, 2015 ........................................................................................................................ 45

Figure 47, Few 401(k) Participants Had Outstanding 401(k) Loans; Loans Tended to Be Small, Selected Years ....... 45

Figure 48, 401(k) Loan Activity Varied Across 401(k) Plan Participants ..................................................................... 46

Figure 49, 401(k) Loan Balances .............................................................................................................................. 47

Figure 50, 401(k) Loan Amounts Varied Across 401(k) Participants ......................................................................... 48

Figure 51, Loans From 401(k) Plans Tended to Be Small ........................................................................................ 47


401(k) Plan Asset Allocation, Account Balances, and Loan

Activity in 2015

By Jack VanDerhei, EBRI; Sarah Holden, ICI; Luis Alonso, EBRI; and Steven Bass, ICI

Introduction

Over the past three decades, 401(k) plans have become the most widespread private-sector employer-sponsored

retirement plan in the United States.1 In 2015, an estimated 54 million American workers were active 401(k) plan

participants.2 By year-end 2015, 401(k) plan assets had grown to $4.4 trillion, representing 19 percent of all retirement

assets.3

In an ongoing collaborative effort, the Employee Benefit Research Institute (EBRI)4 and the Investment Company

Institute (ICI)5 collect annual data on millions of 401(k) plan participants as a means to examine how these participants

manage their 401(k) plan accounts. This report is an update of EBRI’s and ICI’s ongoing research into 401(k) plan

participants’ activity through year-end 2015.6 The report is divided into four sections: the first describes the EBRI/ICI

401(k) database; the second presents a snapshot of participant account balances at year-end 2015; the third looks at

participants’ asset allocations, including analysis of 401(k) participants’ use of target-date, or lifecycle, funds; and the

fourth focuses on participants’ 401(k) loan activity.

EBRI/ICI 401(k) Database

Sources and Types of Data

Several recordkeeping organizations provided records on active participants in 401(k) plans at year-end 2015. These

plan recordkeepers include mutual fund companies, banks, insurance companies, and consulting firms. Although the

EBRI/ICI project has collected data from 1996 through 2015, the universe of data providers may vary from year to

year. In addition, the plans with any given provider may change from year to year, which changes the plans provided.

Thus, aggregate figures in this report generally should not be used to estimate time trends.

Records were encrypted before inclusion in the database to conceal the identity of employers and employees, but were

coded so that both could be tracked by researchers over multiple years.7 Data provided for each participant included

date of birth, from which an age group is assigned; date of hire, from which a tenure range is assigned; outstanding

loan balance; funds in the participant’s investment portfolios; and asset values attributed to those funds. An account

balance for each participant is the sum of the participant’s assets in all funds.8 Plan balances are constructed as the

sum of all participant balances in the plan. Plan size is estimated as the sum of active participants in the plan and, as

such, does not necessarily represent the total number of employees at the sponsoring firm.

Within the year-end 2015 EBRI/ICI database, it is possible to link individuals across plans across a majority of the

recordkeepers. This improves the identification of active participants and resulted in the reclassification of 1.1 million

participant accounts that were multiple accounts owned by single individuals. This procedure allows EBRI and ICI to

begin to consolidate account balances for individuals across data providers to provide a more accurate estimate of

average account balances per individual.9

Investment Options

Investment options are grouped into eight broad categories.10

Equity funds consist of pooled investments primarily invested in stocks, including equity mutual funds, bank

collective trusts, life insurance separate accounts, and other pooled investments.

Bond funds are any pooled account primarily invested in bonds.


Balanced funds are pooled accounts invested in both stocks and bonds. They are classified into two

subcategories: target-date funds and non–target-date balanced funds.

A target-date fund pursues a long-term investment strategy, using a mix of asset classes, or asset allocation,

that the fund provider adjusts to become less focused on growth and more focused on income over time.11

Non–target-date balanced funds include asset allocation, or hybrid, funds in addition to lifestyle funds.12

Company stock is equity in the plan’s sponsor (the employer).

Money funds consist of those funds designed to maintain a stable share price.

Stable-value products, such as guaranteed investment contracts (GICs)13 and other stable-value

funds,14 are reported as one category.

Other is the residual for other investments, such as real estate funds.

Unknown, which is the final category, consists of assets that could not be identified.15

About the EBRI/ICI Database

The EBRI/ICI Participant-Directed Retirement Plan Data Collection Project is the largest, most representative repository

of information about individual 401(k) plan participant accounts. As of December 31, 2015, the EBRI/ICI database

included statistical information about:

• 26.1 million 401(k) plan participants, in

• 101,625 employer-sponsored 401(k) plans, holding

• $1.9 trillion in assets.

The 2015 EBRI/ICI database covers 48 percent of the universe of 401(k) plan participants, 18 percent of plans, and

43 percent of 401(k) plan assets. The EBRI/ICI project is unique because it includes data provided by a wide variety of

plan recordkeepers and, therefore, represents the activity of participants in 401(k) plans of varying sizes—from very

large corporations to small businesses—with a variety of investment options.

Distribution of Plans, Participants, and Assets by Plan Size

The 2015 EBRI/ICI 401(k) database contains information on 101,625 401(k) plans with $1.9 trillion in assets and

26.1 million participants (Figure 1). As in the 401(k) universe at large, most of the plans in the database are small:

59 percent of the plans have 25 or fewer participants, and 24 percent have 26 to 100 participants (Figure 2). In

contrast, only 2 percent of the plans have more than 2,500 participants.

However, participants and assets are concentrated in large plans. For example, 66 percent of participants are in plans

with more than 2,500 participants, and these same plans account for 68 percent of all plan assets.

Because most of the plans have a small number of participants, the asset size for many plans is modest. One-quarter of

the plans have assets of $250,000 or less, and another 29 percent have plan assets between $250,001 and $1,250,000

(Figure 3).

Number of Plan Participants Total Plans Total Participants Total Assets* Average Account Balance1–10 37,299 183,472 $15,199,012,058 $82,84111–25 22,661 379,336 $29,231,758,328 $77,06026–50 14,176 510,903 $37,160,101,117 $72,73451–100 9,918 704,912 $48,369,878,150 $68,618101–250 7,863 1,241,634 $80,931,056,172 $65,181251–500 3,691 1,297,953 $81,319,803,031 $62,652501–1000 2,458 1,724,490 $113,626,446,289 $65,8901,001–2,500 1,906 2,969,211 $211,861,220,666 $71,3532,501–5,000 818 2,883,401 $211,488,103,027 $73,3475,001–10,000 457 3,149,425 $239,898,519,944 $76,172> 10,000 378 11,091,709 $848,198,372,615 $76,471

All 101,625 26,136,446 $1,917,284,271,397 $73,357Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project.Note: The median account balance at year-end 2015 was $16,732.

Total Plan Assets Total Plans Total Participants Total Assets* Average Account Balance$0-$250 25,421 165,084 $2,281,392,080 $13,820$250-$625 15,208 215,627 $6,404,566,546 $29,702$625-$1,250 14,719 326,062 $13,376,319,694 $41,024$1,250-$2,500 14,572 537,251 $26,038,716,458 $48,467$2,500-$6,250 14,360 1,064,449 $56,569,883,213 $53,145$6,250-$12,500 6,661 1,134,792 $58,420,112,123 $51,481$12,500-$25,000 4,006 1,339,327 $70,309,390,837 $52,496$25,000-$62,500 3,205 2,302,859 $124,609,075,745 $54,111$62,500-$125,000 1,391 2,114,232 $122,791,809,419 $58,079$125,000-$250,000 923 2,503,912 $161,576,476,861 $64,530>$250,000 1,159 14,432,851 $1,274,906,528,419 $88,334All 101,625 26,136,446 1,917,284,271,397 $73,357Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project.Note: The median account balance at year-end 2015 was $16,732.* Assets do not add to the total because of rounding.

Figure 3401(k) Plan Characteristics, by Plan Assets, 2015

Figure 1401(k) Plan Characteristics, by Number of Plan Participants, 2015

* Assets do not add to the total because of rounding.

0.4%

42.4% 44.2%

1.3%

23.1%23.5%

15.7%

27.7% 25.4%

23.7%

4.7% 4.5%

59.0%

2.2% 2.3%

Plans Participants Assets

1–2526–100101–2,5002,501–10,000>10,000

Number of Plan Participants

Figure 2Distribution of 401(k) Plans, Participants, and Assets

Percentage of plans, participants, and assets by number of plan participants, 2015

Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project.



About Changes in Account Balances

When analyzing the change in participant account balances over time, it is important to have a consistent sample.

Comparing average account balances across different year-end snapshots can lead to false conclusions. For example,

the addition of a large number of new plans with smaller balances to the database would tend to pull down the average

account balance. This could then be mistakenly described as an indication that balances are declining, but actually

would tell us nothing about consistently participating workers. Similarly, the aggregate average account balance would

tend to be pulled down if a large number of older participants retired. In addition, changes in the sample of

recordkeepers and changes in the set of plans for which they keep records also can influence the change in aggregate

average account balance. Thus, to ascertain what is happening to 401(k) participants’ account balances, a set of

consistent participants must be analyzed. Future research will examine linked data to analyze the consistent sample of

participants in the EBRI/ICI data collection effort.

Although the average account balance for the entire database at year-end 2015 is lower than the average account

balance at year-end 2014, this is entirely the result of participants and plans entering and leaving the database. Among

the sample of participants who were present in the database in both 2014 and 2015, the average account balance

increased by 3.1 percent between year-end 2014 and year-end 2015, from $83,175 to $85,729.16

Relationship of EBRI/ICI 401(k) Database Plans to the Universe of All 401(k) Plans

The 2015 EBRI/ICI 401(k) database is a representative sample of the estimated universe of 401(k) plans. At year-end

2015, all 401(k) plans held a total of $4.4 trillion in assets, and the database represents about 43 percent of that

total.17 The database also covers 48 percent of the universe of active 401(k) plan participants and 18 percent of all

401(k) plans.18 The distribution of assets, participants, and plans in the database for 2015 is similar to the universe of

plans as reported by the U.S. Department of Labor (Figure 4).19

Age and Tenure of 401(k) Plan Participants

The database includes 401(k) participants across a wide range of age and tenure groups. At year-end 2015, 49 percent

of participants were in their 30s or 40s, while 14 percent of participants were in their 20s, 26 percent were in their 50s,

and 11 percent were in their 60s (Figure 5, upper panel). The median age of the participants in the 2015 database is

45 years, down from 46 years in 2014. Because older participants tend to have larger account balances, assets in the

database are more concentrated among the older 401(k) participant groups. At year-end 2015, 63 percent of 401(k)

plan assets were held by participants in their 50s or 60s, while 11 percent of 401(k) plan assets were held by

participants in their 20s or 30s (Figure 5, lower panel). Participants in 401(k) plans represent a wide range of job

tenure experiences. In 2015, 39 percent of the participants in the database had five or fewer years of tenure and

5 percent had more than 30 years of tenure (Figure 6). The median tenure at the current employer was eight years in

2015, the same as in 2014.

Year-End 2015 Snapshot of 401(k) Participants’ Account Balances

Factors That Affect 401(k) Participants’ Account Balances

In any given year, the change in a participant’s account balance in the database is the sum of three factors:

New contributions by the participant, the employer, or both;

Total investment return on account balances, which depends on the performance of financial markets and on

the allocation of assets in an individual’s account; and

Withdrawals, borrowing, and loan repayments.

0.1915319 19.153190.1548561 15.4856050.0773281 7.73280610.2011285 20.1128490.3751555 37.51555

Sources: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project and U.S. Department of Labor

Figure 4EBRI/ICI 401(k) Database Represents

a Wide Cross Section of the 401(k) Universe

401(k) plan characteristics by number of participants: EBRI/ICI 401(k) database in 2015 versus 2014 DOL Form 5500 for all 401(k) plans

0

20

40

60

80

100

100 or fewer 101 to 500 501 to 1,000 1,001 to 5,000 >5,000Number of plan participants

Plan AssetsPercentage of plan assets

2014 Form 5500

2015 EBRI/ICI

0

20

40

60

80

100


ParticipantsPercentage of participants

2015 EBRI/ICI

2014 Form 5500

0

20

40

60

80

100


PlansPercentage of plans

2015 EBRI/ICI

2014 Form 5500


20s

30s50s

60s

11%

26%

25%

24%

14%(Median Age: 45 Years)

Active 401(k) Plan Participants

40s

Figure 5401(k) Participants Represent a Range of Ages

Percentage of active 401(k) plan participants and 401(k) plan assets, by participant age, 2015

1%

10%

26%

43%

20%

60s

50s

20s

40s

401(k) Plan Assets

Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project.Note: Components do not add to 100 percent because of rounding.

30s

0–2 Years

>2–5 Years

>5–10 Years

>10–20 Years

>20–30 Years

>30 Years

Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project.Note: The tenure variable is generally years working at current employer, and thus may overstate years of participation in the 401(k) plan.

20%

19%

22%

9%

5%

24%

Figure 6401(k) Participants Represent a Range of Job Tenures

Percentage of active 401(k) plan participants, by years of tenure, 2015

Median Tenure: 8 Years



The change in any individual participant’s account balance in the database is influenced by the magnitude of these

three factors relative to the starting account balance.20 For example, a contribution of a given dollar amount produces a

larger growth rate when added to a smaller account. On the other hand, investment returns of a given percentage

produce larger dollar increases (or decreases) when compounded on a larger asset base.

Asset allocation also influences investment returns and changes in assets. For example, stocks (as measured by the

S&P 500 total return index) increased 1.4 percent during 2015, while bonds (as measured by the Barclays Capital U.S.

Aggregate Bond Index) increased 0.5 percent (Figures 7 and 8).

Definition of 401(k) Plan Account Balance

As a cross section, or snapshot, of the entire population of 401(k) plan participants, the database includes 401(k)

participants who are young and those who are new to their jobs, as well as older participants and those who have been

with their current employers for many years. These annual updates of the database provide snapshots of 401(k) plan

account balances, asset allocation, and loan activity across wide cross sections of participants.

However, the cross-sectional analysis is not well suited to addressing the question of the impact of participation in

401(k) plans over time. Cross sections change in composition over time because the selection of data providers and

sample of plans using a given provider vary from year to year and because 401(k) participants join or leave plans.21 In

addition, the database contains only the account balances held in the 401(k) plans at participants’ current employers.

Retirement savings held in plans at previous employers or rolled over into individual retirement accounts (IRAs) are not

included in the analysis.22 Furthermore, account balances are net of unpaid loan balances. Because of all these factors,

it is not correct to presume that the change in the average or median account balance for the database as a whole

reflects the experience of “typical” 401(k) plan participants.

Size of 401(k) Plan Account Balances

At year-end 2015, the average account balance was $73,357 and the median account balance was $16,732 (Figure 9),

but balances varied widely. For example, about three-quarters of the participants in the 2015 EBRI/ICI 401(k) database

had account balances that were lower than $73,357, the size of the average account balance. In fact, 41.3 percent of

participants had account balances of less than $10,000, while 19.3 percent of participants had account balances greater

than $100,000 (Figure 10). The variation in account balances partly reflects the effects of participant age, tenure,

salary, contribution behavior, rollovers from other plans, asset allocation, withdrawals, loan activity, and employer

contribution rates. This paper examines the relationship between account balances and participants’ age, tenure, and

salary.

Relationship of Age and Tenure to 401(k) Plan Account Balances

Age and account balance are positively correlated among participants covered by the 2015 database.23 Examination of

the age composition of account balances finds that 54 percent of participants with account balances of less than

$10,000 were in their 20s or 30s (Figure 11). Similarly, 61 percent of participants with account balances greater than

$100,000 were in their 50s or 60s. The positive correlation between age and account balance is expected because

younger workers are likely to have lower incomes and to have had less time to accumulate a balance with their current

employer. In addition, they are less likely to have rollovers from a previous employer’s plan in their current plan

accounts.

Account balance and tenure are also positively correlated among participants in the 2015 database. A participant’s

tenure with an employer serves as a proxy for the length of time a worker has participated in the 401(k) plan.24 Indeed,

66 percent of participants with account balances of less than $10,000 had five or fewer years of tenure, while

75 percent of participants with account balances greater than $100,000 had more than 10 years of tenure

(Figure 12).25

Month-end level, a December 2002 to December 2016


$37,323

$55,502

$39,885

$65,454

$45,519

$60,329 $63,929

$72,383

$76,293 $73,357

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

1996 1999 2002 2007 2008 2010 2012 2013 2014 2015

Figure 9Snapshot of Year-End 401(k) Plan Account Balances

401(k) plan participant account balances,a selected yearsb

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

1996 1999 2002 2007 2008 2010 2012 2013 2014 2015

Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project.a Account balances are participant account balances held in 401(k) plans at the participants' current employers and are net of plan loans. Retirement savings held in plans at previous employers or rolled over into IRAs are not included.b The sample of participants changes over time.

Median(mid-point)

Average


41.3%

11.9%

7.3%5.1%

3.9% 3.1% 2.5% 2.1% 1.8% 1.6%

9.1% 10.2%

Size of Account Balance

Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project.Note: At year-end 2015, the average account balance among all 26.1 million 401(k) particiants was $73,357; the median account balance was $16,732. Account balances are participant account balances held in 401(k) plans at the participants’ current employers and are net of plan loans. Retirement savings held in plans at previous employers or rolled over into IRAs are not included. Components may not add to 100 percent because of rounding.

Figure 10Distribution of 401(k) Plan Account Balances, by Size of Account Balance

Percentage of participants with account balances in specified ranges, 2015

27%

4% <0.5%

27%

26%

10%

21%

29%

29%

17%

29%

43%

8% 12%18%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


60s

50s

40s

30s

20s

Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project.Note: Account balances are participant account balances held in 401(k) plans at the participants’ current employers and are net of plan loans. Retirement savings held in plans at previous employers or rolled over into IRAs are not included. Percentages may not add to 100 percent because of rounding.

Less Than $10,000 >$40,000–$50,000 More Than $100,000

Age Group

Figure 11Age Composition of Selected 401(k) Plan Account Balance CategoriesPercentage of participants with account balances in specified ranges, 2015



Examining the interaction of both age and tenure with account balances reveals that, for a given age group, average

account balances tend to increase with tenure. For example, the average account balance of participants in their 60s

with up to two years of tenure was $37,976, compared with $280,976 for participants in their 60s with more than 30

years of tenure (Figure 13).26 Similarly, the average account balance of participants in their 40s with up to two years of

tenure was $19,088, compared with $158,182 for participants in their 40s with more than 20 years of tenure.

The distribution of account balances underscores the effects of age and tenure on account balances. In a given age

group, shorter tenure tends to mean that a higher percentage of participants will have account balances of less than

$10,000. For example, 88 percent of participants in their 20s with two or fewer years of tenure had account balances of

less than $10,000 in 2015, compared with 55 percent of participants in their 20s with between five and 10 years of

tenure (Figure 14). Older workers display a similar pattern. For example, 59 percent of participants in their 60s with

two or fewer years of tenure had account balances of less than $10,000. In contrast, less than one-sixth of those in

their 60s with more than 20 years of tenure had account balances of less than $10,000.27

In a given age group, longer tenure tends to mean that a higher percentage of participants will have account balances

greater than $100,000. For example, 20 percent of participants in their 60s with five to 10 years of tenure had account

balances in excess of $100,000 in 2015 (Figure 15). However, 46 percent of participants in their 60s with between

20 and 30 years of tenure with their current employer had account balances greater than $100,000. The percentage

increases to 57 percent for participants in their 60s with more than 30 years of tenure.

Relationship Between 401(k) Plan Account Balances and Salary

Participants’ account balances vary not only with age and tenure, but also with salary. Figure 16 reports the account

balances of longer-tenured participants at their current employers’ 401(k) plans. Retirement savings held at previous

employers or amounts rolled over to IRAs are not included in the analysis. To capture as long a savings history as

possible, only longer-tenured participants are included in this analysis. However, it is important to note that the tenure

variable indicates the time that individuals have been with their current employers and may not reflect the length of

time they have participated in a 401(k) plan. One reason that job tenure may not reflect length of participation in the

401(k) plan, particularly among older participants, is that the proposed regulations for 401(k) plans were not introduced

until 1981.28

Older, longer-tenured, and higher-income participants tend to have larger account balances, which are important for

meeting their income-replacement needs in retirement.29 For longer-tenured participants in their 20s with salaries

between $20,000 and $40,000, the median account balance was $6,764 in 2015 (Figure 16). Longer-tenured

participants in their 20s earning more than $80,000 to $100,000 had a median account balance of $50,348, while those

earning more than $100,000 had a median account balance of $40,378. Among longer-tenured participants in their 60s

with $20,000 to $40,000 in salary in 2015, the median account balance was $60,585. For longer-tenured participants in

their 60s earning more than $100,000, the median account balance was $376,091.

The ratio of participant account balance to salary tends to be positively correlated with age and tenure.30 Participants in

their 50s and 60s—having had more time to accumulate assets—tended to have higher ratios, while those in their 20s

had the lowest ratios (Figure 17). In addition, for any given age and tenure combination, the ratio of account balance

to salary varies somewhat with salary. For example, among participants in their 20s, the ratio tends to increase slightly

with salary for low-to-moderate salary groups (Figure 18). However, at high salary levels the ratio tends to decline

somewhat. A similar pattern occurs among participants in their 60s (Figure 19).31

Year-End 2015 Snapshot of 401(k) Participants’ Asset Allocation

At year-end 2015, 43 percent of 401(k) plan participants’ account balances were invested in equity funds, on average,

the same as in 2014, and compared with 44 percent at year-end 2013, 37 percent at year-end 2008, and 48 percent at

year-end 2007 (Figure 20). Altogether, equity securities—equity funds, the equity portion of balanced funds,32 and

company stock—represented 66 percent of 401(k) plan participants’ assets at year-end 2015 (Figure 21).

40%

9% 3%

26%

18%6%

18%

28%

17%

12%

31%

38%

3%10%

23%

1%4%

14%

Less Than $10,000 >$40,000–$50,000 More Than $100,000


Figure 12Tenure Composition of Selected 401(k) Plan Account Balance Categories

Percentage of participants with account balances in specified ranges, 2015

>30 Years

>20–30 Years

>10–20 Years

>5–10 Years

>2–5 Years

0–2 Years

Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project.Note: Percentages may not add to 100 percent because of rounding. Account balances are participant account balances held in 401(k) plans at the participants’ current employers and are net of plan loans. Retirement savings held in plans at previous employers or rolled over into IRAs are not included. The tenure variable is generally years working at current employer, and thus may overstate years of participation in the 401(k) plan.

Tenure


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0–2 >2–5 >5–10 >10–20 >20–30 >30

Years of Tenure

20s

30s

60s40s

50s

Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project.Note: Account balances are participant account balances held in 401(k) plans at the participants’ current employers and are net of plan loans. Retirement savings held in plans at previous employers or rolled over into IRAs are not included.The tenure variable is generally years working at current employer, and thus may overstate years of participation in the 401(k) plan.

Figure 14401(k) Plan Account Balances Less Than $10,000, by Participant Age and Tenure

Percentage of participants with account balances less than $10,000 at year-end 2015

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0–2 >2–5 >5–10 >10–20 >20–30 >30

Years of Tenure

20s

30s

40s

50s

60s

Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project.Note: Account balances are participant account balances held in 401(k) plans at the participants’ current employers and are net of plan loans. Retirement savings held in plans at previous employers or rolled over into IRAs are not included. The tenure variable is generally years working at current employer, and thus may overstate years of participation in the 401(k) plan.

Figure 15401(k) Plan Account Balances Greater Than $100,000,

by Participant Age and TenurePercentage of participants with account balances

greater than $100,000 at year-end 2015


Salary Range 20s 30s 40s 50s 60s

$20,000–$40,000 $6,764 $19,797 $52,783 $78,077 $60,585

>$40,000–$60,000 $15,225 $33,715 $74,541 $109,075 $95,357

>$60,000–$80,000 $29,126 $57,952 $119,778 $174,458 $149,997

>$80,000–$100,000 $50,348 $89,604 $179,981 $255,631 $222,328

>$100,000 $40,378 $141,511 $305,302 $420,852 $376,091Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project.

b Longer-tenured participants are used in this analysis to capture the longest possible work and savings history (see note a). The tenure variable tends to be years with the current employer rather than years of participation in the 401(k) plan. One reason that job tenure may not reflect length of participation in the 401(k) plan, particularly among older participants, is that the proposed regulations for 401(k) plans were not introduced until 1981.

Figure 16Median 401(k) Plan Account Balancea Among Longer-Tenuredb

Participants, by Age and Salary, 2015

Participant Age Group

a Account balances are participant account balances held in 401(k) plans at the participants’ current employers and are net of plan loans. Retirement savings held in plans at previous employers or rolled over into IRAs are not included.

0%

50%

100%

150%

200%

250%

300%

0–2 >2–5 >5–10 >10–20 >20–30 >30

Years of Tenure

Figure 17Ratio of 401(k) Plan Account Balance to Salary,

by Participant Age and TenurePercentage, 2015

50s

40s

60s

30s

20s




Changes in Asset Allocation Between Year-End 2014 and Year-End 2015

Investment performance likely explains a good deal of the fluctuation in 401(k) participants’ asset allocations over time.

Much of the movement in the largest component, equity funds, tends to reflect overall equity market prices, which

generally rose from 2003 through 2007, dropped in 2008, rose from 2009 through 2010, moderated in 2011, rose from

2012 through 2014, and moderated in 2015 (Figures 7, 8, and 20). At year-end 2015, equity funds were 43 percent of

the assets in the EBRI/ICI 401(k) database, the same as in 2014. Balanced funds, which invest in both equities and

fixed-income securities, increased slightly in share, accounting for 26 percent of the assets in the database at year-end

2015. Despite minor shifts, most 401(k) participants appeared not to have made dramatic shifts in their asset

allocations in 2015.33

Asset Allocation and Participant Age

As in previous years, the database for year-end 2015 shows that participants’ asset allocation varied considerably with

age.34 Younger participants tended to favor equity funds and balanced funds, while older participants were more likely

to invest in fixed-income securities such as bond funds, GICs and other stable-value funds, or money funds (Figure 21).

For example, among participants in their 20s, the average allocation to equity and balanced funds was more than

80 percent of assets, compared with about 60 percent of assets among participants in their 60s.

Younger participants had consistently higher allocations to target-date funds. A target-date, or lifecycle, fund pursues a

long-term investment strategy, using a mix of asset classes that follow a predetermined reallocation, typically

rebalancing to shift its focus from growth to income as the fund approaches and passes its target date.35 At year-end

2015, 20 percent of 401(k) assets in the database were invested in target-date funds, up from 18 percent at year-end

2014.36 Among participants in their 20s, 47 percent of their 401(k) assets were invested in target-date funds at year-

end 2015; among participants in their 60s, 17 percent of their 401(k) assets were invested in target-date funds.

Asset Allocation and Investment Options

The investment options that a plan offers can significantly affect how participants allocate their 401(k) assets. Figure 22

presents the distribution of plans, participants, and assets by four combinations of investment offerings.

The first category is the base group, which consists of plans that offer neither company stock nor GICs or other stable-

value funds. Forty-one percent of participants in the 2015 EBRI/ICI 401(k) database were in these plans, which

generally offer equity funds, bond funds, money funds, and balanced funds as investment options.

Another 27 percent of participants were in plans that offer GICs and other stable-value funds as an investment option,

in addition to the base options.

Alternatively, 17 percent of participants were in plans that offer company stock but no stable-value products, while the

remaining 15 percent of participants were in plans that offered both company stock and stable-value products in

addition to the base options.

Target-date funds were available in 65 percent of the 401(k) plans in the year-end 2015 database (Figure 22).37 These

plans offered target-date funds to 74 percent of the participants in the database.38 Among participants who were

offered target-date funds, 67 percent held them at year-end 2015. Target-date fund assets represented 27 percent of

the assets of plans offering such funds in their investment lineups.

Asset Allocation by Investment Options and Age, Salary, and Plan Size

Asset allocation also varies with participant age; Figure 23 demonstrates this with an analysis of asset allocation by

investment options and also by participant age. Because asset allocation is influenced by the investment options

available to participants, Figure 24 presents asset allocation by salary range and by investment options. Salary

information is available for a subset of participants in the 2015 EBRI/ICI 401(k) database.

0%

10%

20%

30%

40%

50%

60%

70%

Salary Range


0–2 Years

>2–5 Years

>5–10 Years

Figure 18Ratio of 401(k) Plan Account Balance to Salary for Participants in Their 20s, by Tenure

Percentage, 2015

0%

50%

100%

150%

200%

250%

300%

350%

400%

Salary Range


0–2 Years

>2–5 Years

>5–10 Years

>10–20 Years>20 Years

Figure 19Ratio of 401(k) Plan Account Balance to Salary for Participants in Their 60s, by Tenure

Percentage, 2015



Participant asset allocation also varies with plan size (Figure 25, top panel), but much of the variation can be explained

by differences in the investment options offered by plan sponsors. For example, the percentage of plan assets invested

in company stock rises with plan size, in part, because few small plans offered company stock as an investment option.

For example, 1 percent of participants in small plans (100 participants or fewer) were offered company stock as an

investment option, while 51 percent of participants in plans with more than 5,000 participants were offered company

stock as an investment option in 2015. Thus, to analyze the potential effect of plan size, the remaining panels of Figure

25 group plans by investment options and plan size.

Distribution of Equity Fund Allocations and Participant Exposure to Equities

Participants in 401(k) plans may hold equities through a variety of options including equity funds, company stock, and

balanced funds. This section focuses first on the investing pattern of 401(k) plan participants with respect to equity

funds. The asset allocation of participants without equity funds is explored next, because 401(k) participants holding no

equity funds may hold equities in the form of company stock or through balanced funds. Finally, the overall investment

in equities across all 401(k) plan participants is presented.

Asset Allocation to Equity Funds

The year-end 2015 EBRI/ICI 401(k) database shows that, on average, 43 percent of participant account balances were

allocated to equity funds (Figure 21), which is one way to hold equities. However, individual asset allocations varied

widely across participants. For example, 54 percent of participants held no equity funds, while about 16 percent of

participants held more than 80 percent of their balances in equity funds (Figures 26 and 27).

Furthermore, the percentage of participants holding no equity funds varied with age, with 71 percent of participants in

their 20s, 49 percent of participants in their 40s, and 51 percent of participants in their 60s holding no equity funds.

The percentage of 401(k) participants holding no equity funds also varied with tenure—participants with five or fewer

years of tenure were more likely not to be invested in equity funds (Figure 27). The percentage of participants holding

no equity funds tends to fall as salary increases.

Investment Options Offered by Plan Plans Participants AssetsEquity, bond, money, and/or balanced funds 76,479 10,718,267 $639,486,832,441

Of which: target-date fundsa are an option 49,597 8,185,523 $475,102,536,915Equity, bond, money, and/or balanced funds, and GICsb and/or other stable value funds 23,127 6,926,866 $515,936,218,799

Of which: target-date fundsa are an option 14,566 4,721,893 $355,831,919,842Equity, bond, money, and/or balanced funds, and company stock 817 4,478,825 $337,616,706,768

Of which: target-date fundsa are an option 536 3,371,140 $249,169,297,919Equity, bond, money, and/or balanced funds, and company stock, and GICsb and/or

other stable value funds 1,202 4,012,488 $424,244,513,390 Of which: target-date fundsa are an option 846 3,091,846 $322,134,548,731

Allc 101,625 26,136,446 1,917,284,271,397 Of which: target-date fundsa are an option 65,545 19,370,402 1,402,238,303,406

Investment Options Offered by PlanEquity, bond, money, and/or balanced funds 75.3% 41.0% 33.4%

Of which: target-date fundsa are an option 48.8% 31.3% 24.8%Equity, bond, money, and/or balanced funds, and GICsb and/or other stable value funds 22.8% 26.5% 26.9%

Of which: target-date fundsa are an option 14.3% 18.1% 18.6%Equity, bond, money, and/or balanced funds, and company stock 0.8% 17.1% 17.6%

Of which: target-date fundsa are an option 0.5% 12.9% 13.0%Equity, bond, money, and/or balanced funds, and company stock, and GICsb and/or

other stable value funds 1.2% 15.4% 22.1% Of which: target-date fundsa are an option 0.8% 11.8% 16.8%

Allc 100% 100% 100% Of which: target-date fundsa,c are an option 64.5% 74.1% 73.1%


b GICs are guaranteed investment contracts.c Components may not add to total because of rounding.Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated.

Figure 22

Distribution of 401(k) Plans, Participants, and Assets, by Investment Options, 2015

Percentage of plans

Percentage of participants Percentage of assets

a A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approaches and passes the target date of the fund, which is usually included in the fund's name.

Non-Target-DateAge Equity Target-Date Balanced Bond M oney GICsc,d/Stable- Com pany Memo:

Group Funds Fundsb, c Funds Funds Funds Value Funds Stockc Other Unknow n Equitiese

20s 28.3% 46.6% 7.5% 4.9% 1.3% 1.4% 4.7% 3.5% 1.8% 79.5%

30s 41.6% 31.0% 5.3% 5.6% 2.2% 2.6% 5.7% 4.2% 1.7% 78.0%

40s 48.1% 20.5% 5.3% 6.7% 2.9% 3.6% 6.5% 4.6% 1.7% 74.1%

50s 43.9% 17.5% 5.7% 8.5% 3.9% 6.7% 7.0% 5.4% 1.5% 65.3%

60s 37.7% 16.9% 5.9% 10.1% 5.7% 9.8% 6.2% 6.1% 1.6% 55.2%

All 43.1% 19.8% 5.7% 8.1% 3.9% 6.1% 6.5% 5.3% 1.6% 66.4%

Figure 21Average Asset Allocation of 401(k) Plan Accounts, by Participant Age

Percentage of account balances,a 2015

Source: Tabulations from EBRI/ICI Participant-Directed Retirement P lan Data Collection Pro ject.a Row percentages may not add to 1 00 percent because o f rounding. Percentages are dollar-weighted averages.

b A target-date fund typically rebalances its portfo lio to become less focused on growth and more focused on income as it approaches and passes the

target date of the fund, which is usually included in the fund’s name. c Not all participants are o ffered this investment option. See Figure 22.

d GICs are guaranteed investment contracts. e Equities include equity funds, company stock, and the equity portion o f balanced funds.

Note: “ Funds” include mutual funds, bank co llective trusts, life insurance separate accounts, and any poo led investment product primarily invested in the

security indicated.


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5


Equity Funds

Target-Date

Fundsb

Non-Target-Date Balanced

FundsBond Funds

Money Funds

GICsc/Stable-Value

Company Stock

Plan Size by Number of ParticipantsAll Plans

1–100 45.4% 21.8% 6.3% 10.9% 4.4% 3.2% 0.1%101–500 45.8% 21.7% 6.7% 10.0% 4.1% 4.2% 0.4%501–1,000 45.9% 21.8% 6.4% 8.9% 3.9% 4.7% 1.3%1,001–5,000 45.5% 19.9% 6.0% 7.9% 3.7% 6.3% 3.2%>5,000 41.1% 19.0% 5.2% 7.4% 3.9% 6.8% 10.0%All 43.1% 19.8% 5.7% 8.1% 3.9% 6.1% 6.5%

Plans Without Company Stock, GICsc/Stable-Value Funds1–100 45.4% 23.2% 5.8% 12.4% 5.0%101–500 46.6% 23.7% 6.8% 11.3% 5.1%501–1,000 48.3% 22.6% 7.1% 10.2% 5.0%1001–5,000 49.6% 22.0% 7.5% 8.9% 5.2%>5,000 48.0% 23.2% 6.8% 10.0% 5.3%All 47.8% 22.9% 6.9% 10.3% 5.2%

Plans With GICsc/Stable-Value Funds1–100 46.2% 17.4% 8.0% 6.3% 2.2% 13.8%101–500 45.5% 17.5% 6.4% 7.6% 1.9% 13.3%501–1,000 44.1% 20.9% 5.0% 7.1% 1.6% 13.6%1,001–5,000 44.1% 19.2% 5.1% 7.4% 1.8% 14.0%>5,000 45.9% 19.1% 5.2% 9.0% 2.3% 11.6%All 45.3% 19.0% 5.4% 8.1% 2.0% 12.8%

Plans With Company Stock

1–100d 40.1% 13.9% 7.4% 8.6% 5.9% 10.4%101–500 41.7% 18.1% 5.7% 8.1% 4.9% 15.1%501–1,000 37.5% 20.9% 6.3% 8.9% 5.0% 17.9%1,001–5,000 44.4% 16.1% 5.0% 7.6% 4.8% 15.9%>5,000 35.3% 20.6% 3.3% 6.6% 5.8% 21.0%All 36.8% 19.9% 3.6% 6.8% 5.7% 20.1%

Plans With Company Stock and GICsc/Stable-Value Funds1–100 35.0% 16.4% 6.9% 6.5% 1.9% 14.5% 5.7%101–500 34.8% 18.9% 6.5% 6.3% 3.5% 12.4% 4.4%501–1,000 35.6% 17.4% 6.4% 5.2% 3.4% 9.3% 13.1%1,001–5,000 36.4% 18.6% 4.5% 5.9% 2.8% 11.4% 11.0%>5,000 38.6% 15.5% 5.9% 5.5% 2.8% 12.1% 13.8%All 38.3% 15.9% 5.8% 5.6% 2.8% 8.8% 13.4%

Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project.a Minor investment options are not shown; therefore, row percentages will not add to 100 percent. Percentages are dollar-weighted averages.b A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approaches and passes the target date of the fund, which is usually included in the fund’s name. c GICs are guaranteed investment contracts.d Because few plans fall into this category, these percentages may be heavily influenced by a few outliers.Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated.

Figure 25Average Asset Allocation of 401(k) Plan Accounts,

by Plan Size and Investment OptionsPercentage of account balances,a 2015

Age Group Zero 1–10% 11–20% 21–30% 31–40% 41–50% 51–60% 61–70% 71–80% 81–90% 91–100%

20s 71.1% 1.1% 1.2% 1.6% 1.8% 2.3% 2.4% 2.6% 3.4% 3.5% 9.1%

30s 57.4% 2.1% 2.0% 2.5% 2.7% 3.4% 3.9% 4.2% 4.8% 5.1% 11.9%

40s 48.8% 2.6% 2.3% 3.0% 3.4% 4.2% 5.1% 5.4% 6.2% 5.5% 13.5%

50s 47.1% 3.3% 2.8% 3.6% 4.0% 5.1% 6.1% 6.0% 5.6% 4.1% 12.2%

60s 50.9% 3.8% 3.2% 4.1% 4.6% 5.3% 5.8% 4.9% 4.1% 2.9% 10.4%

All 53.9% 2.6% 2.3% 3.0% 3.3% 4.1% 4.7% 4.8% 5.1% 4.4% 11.8%

Figure 26

Asset Allocation Distribution of 401(k) Participant Account Balance to Equity Funds, by Participant Age

Percentage of participants,a,b 2015

Percentage of Account Balance Invested in Equity Funds

Source: Tabulations from EBRI/ICI Participant-Directed Retirement P lan Data Collection Pro ject.a The analysis includes the 26.1 million participants in the year-end 201 5 EBRI/ICI database 401 (k) database.b Row percentages may not add to 1 00 percent because o f rounding.

Note: "Equity funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any poo led investment product primarily

invested in equities. In addition, 401 (k) participants may hold equities through balanced funds or company stock―see Figure 30 for the

distribution of 401 (k) plan account balances to equities.



Asset Allocation of 401(k) Plan Participants Without Equity Funds

Participants with no equity fund balances may still have exposure to the stock market through company stock or

balanced funds, which include target-date funds. In fact, 84 percent of 401(k) participants with no equity fund

allocation had investments in either company stock or balanced funds at year-end 2015 (Figure 28). For example,

90 percent of participants in their 20s without equity funds held equities through company stock, balanced funds, or

both. Indeed, 74 percent of participants in their 20s without equity funds held target-date funds—which tend to be

highly concentrated in equity securities for that age group—as their only equity investment. Another 8 percent of

participants in their 20s without equity funds had equity exposure only through non–target-date balanced funds, and

another 3 percent held company stock as their only equity investment. Five percent had equity exposure through some

combination of target-date funds, non–target-date balanced funds, or company stock. As a result, many participants

with no equity funds had exposure to equity-related investments through company stock, balanced funds, or both

(Figure 29).

Asset Allocation to Equities

Among individual 401(k) plan participants, the allocation of account balances to equities (equity funds, company stock,

and the equity portion of balanced funds) varies widely around the average of 66 percent for all participants in the

2015 database (Figure 21).39 Forty-eight percent of participants had more than 80 percent of their account balances

invested in equities, while 9 percent held no equities at all at the end of 2015 (Figure 30). Younger 401(k) plan

participants were slightly more likely to hold at least some equities and much more likely to have high concentrations in

equities. At year-end 2015, 7 percent of 401(k) plan participants in their 20s had no equities, compared with 13 percent

of 401(k) plan participants in their 60s. About three-quarters of 401(k) plan participants in their 20s had more than

80 percent of their account balances invested in equities, compared with about one-fifth of 401(k) plan participants in

their 60s.

Changes in Concentrations in Equities Since the Financial Crisis

More 401(k) plan participants held equities at year-end 2015 compared with year-end 2007, and more had higher

concentrations in equities. Overall, at year-end 2015, 9 percent of 401(k) plan participants held no equities, down from

13 percent at year-end 2007, and 48 percent had more than 80 percent of their account balances invested in equities

at year-end 2015, compared with 44 percent at year-end 2007 (Figure 31).

Younger 401(k) participants were much more likely to hold equities and to hold high concentrations in equities at year-

end 2015 compared with year-end 2007. For example, about three-quarters of 401(k) plan participants in their 20s had

more than 80 percent of their account balances invested in equities at year-end 2015, compared with less than half at

year-end 2007. Older 401(k) participants were a little less likely to have such high concentrations in equities at year-

end 2015 compared with year-end 2007: 21 percent of 401(k) plan participants in their 60s had more than 80 percent

of their account balances invested in equities at year-end 2015, compared with 30 percent of 401(k) plan participants in

their 60s at year-end 2007, although a lower share held no equities.

Distribution of 401(k) Participants’ Balanced Fund Allocations by Age

Individual 401(k) participants’ asset allocation to balanced funds varied widely around an average of 26 percent at

year-end 2015 (Figure 20). For example, 39 percent of participants held no balanced funds, while 40 percent of

participants held more than 80 percent of their accounts in balanced funds at the end of 2015 (Figure 32). At year-end

2015, 60 percent of 401(k) participants held balanced funds through target-date funds and non–target-date balanced

funds, similar to the share in 2014.40 About half of 401(k) participants held target-date funds, 14 percent held non–

target-date balanced funds, and 2 percent held both.

Target-date fund use varies with participant age and tenure. Younger participants were more likely to hold target-date

funds than older participants. At year-end 2015, 63 percent of participants in their 20s held target-date funds,

compared with 41 percent of participants in their 60s. Recently hired participants were more likely to hold target-date

funds than those with more years on the job: at year-end 2015, 60 percent of participants with two or fewer years of

tenure held target-date funds, compared with about half of participants with more than five to 10 years of tenure, and

about 30 percent of participants with more than 30 years of tenure (Figure 33).

Zero 1–20% >20%–80% >80%All 53.9% 4.9% 25.0% 16.2%Age Group

20s 71.1% 2.2% 14.1% 12.6%30s 57.4% 4.1% 21.5% 17.1%40s 48.8% 5.0% 27.3% 18.9%50s 47.1% 6.1% 30.4% 16.3%60s 50.9% 7.0% 28.8% 13.3%

Tenure (years)0–2 67.3% 2.3% 17.3% 13.1%>2–5 63.6% 3.5% 20.0% 13.0%>5–10 54.7% 5.1% 24.9% 15.3%>10–20 42.3% 6.8% 32.1% 18.8%>20–30 35.9% 8.5% 36.1% 19.4%>30 38.4% 10.1% 35.5% 16.0%

Salary$20,000–$40,000 68.8% 4.0% 17.7% 9.5%>$40,000–$60,000 57.7% 5.9% 24.6% 11.8%>$60,000–$80,000 49.0% 6.8% 29.9% 14.4%>$80,000–$100,000 42.8% 7.3% 33.9% 15.9%>$100,000 31.8% 8.1% 40.4% 19.7%


trusts, life insurance separate accounts, and any pooled investment product primarily invested in equities. In addition, 401(k) participants may hold equities through balanced funds or company stock—see Figure 30 for the distribution of 401(k) plan account balances to equities. The tenure variable is generally years working at current employer, and thus may overstate years of participation in the 401(k) plan. Salary information is available for a subset of participants in the EBRI/ICI 401(k) database.

Figure 27Asset Allocation Distribution of 401(k) Participant Account

Balance to Equity Funds, by Participant Age, Tenure, or SalaryPercentage of participants, 2015

Percentage of Account Balance Invested in Equity Funds

Note: Row percentages may not add to 100 percent because of rounding. "Equity funds” include mutual funds, bank collective

Target-date Non-target-date Com pany Company funds* as balanced funds stock as

stock and/or only equity as only equity only equitybalanced funds investment investment investment

Combination of company stock and/or

target-date funds,* and/or non-target-date balanced funds

Age Group20s 90.3% 74.2% 8.3% 3.2% 4.6%30s 87.8% 68.5% 7.7% 3.9% 7.7%40s 84.4% 62.1% 9.0% 5.3% 8.1%50s 81.4% 57.1% 8.7% 6.8% 8.9%60s 75.1% 51.0% 8.6% 7.4% 8.1%

All 84.3% 63.1% 8.6% 5.2% 7.4%

Tenure (years)0–2 89.5% 74.1% 9.2% 2.6% 3.6%>2–5 87.9% 70.8% 8.3% 3.3% 5.5%>5–10 83.2% 61.6% 8.4% 4.8% 8.4%>10–20 77.0% 44.7% 8.2% 8.8% 15.3%>20–30 71.1% 37.6% 8.5% 12.4% 12.6%>30 66.6% 32.7% 9.0% 16.4% 8.5%

All 84.3% 63.1% 8.6% 5.2% 7.4%

Figure 28Percentage of 401(k) Plan Participants Without Equity Fund Balances

Who Have Equity Exposure, by Participant Age or Tenure, 2015Percentage of Participants Without Equity Funds

Source: Tabulations from EBRI/ICI Participant-Directed Retirement P lan Data Collection Pro ject.

* A target-date fund typically rebalances its portfo lio to become less focused on growth and more focused on income as it approaches and passes the target date of the fund, which is usually included in the fund’s name. Note: Components may no t add to the total in the first column because of rounding. “ Funds” include mutual funds, bank co llective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated. The tenure variable is generally years working at current employer, and thus may overstate years of participation in the 401 (k) plan.


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Dat

a C

olle

ctio

n P

roje

ct.

a R

ow p

erce

ntag

es m

ay n

ot a

dd to

100

per

cent

bec

ause

of r

ound

ing.

Per

cent

ages

are

dol

lar-

wei

ghte

d av

erag

es.

c G

ICs

are

guar

ante

ed in

vest

men

t con

tract

s.d Th

e an

alys

is in

clud

es th

e 14

.1 m

illio

n pa

rtici

pant

s w

ith n

o eq

uity

fund

s at

yea

r-en

d 20

15.

N

ote:

“Fun

ds” i

nclu

de m

utua

l fun

ds, b

ank

colle

ctiv

e tru

sts,

life

insu

ranc

e se

para

te a

ccou

nts,

and

any

poo

led

inve

stm

ent p

rodu

ct p

rimar

ily in

vest

ed in

the

secu

rity

indi

cate

d. T

he te

nure

va

riabl

e is

gen

eral

ly y

ears

wor

king

at c

urre

nt e

mpl

oyer

, and

thus

may

ove

rsta

te y

ears

of p

artic

ipat

ion

in th

e 40

1(k)

pla

n.

Figu

re 2

9A

vera

ge

Ass

et A

lloca

tio

n f

or

401(

k) P

lan

Par

tici

pan

ts W

ith

ou

tE

qu

ity

Fu

nd

Bal

ance

s, b

y P

arti

cip

ant

Ag

e o

r T

enu

re

Per

cent

age

of a

ccou

nt b

alan

ces,

a 201

5

b A ta

rget

-dat

e fu

nd ty

pica

lly re

bala

nces

its

portf

olio

to b

ecom

e le

ss fo

cuse

d on

gro

wth

and

mor

e fo

cuse

d on

inco

me

as it

app

roac

hes

and

pass

es th

e ta

rget

dat

e of

the

fund

, whi

ch is

us

ually

incl

uded

in th

e fu

nd’s

nam

e.



Distribution of 401(k) Participants’ Company Stock Allocations

Participants’ allocations to company stock remained in line with recent previous years. Nearly one-third (or 8.5 million)

of the 401(k) participants in the 2015 EBRI/ICI 401(k) database were in plans that offered company stock as an

investment option (Figure 22). Among these participants, 77 percent held 20 percent or less of their account balances

in company stock, including 58 percent who held none (Figure 34). On the other hand, 8 percent had more than

80 percent of their account balances invested in company stock.

Asset Allocations of Recently Hired Participants

Comparing snapshots of newly hired 401(k) plan participants’ asset allocations provides further insight into recent

investment allocations. Balanced funds, which include lifestyle and target-date funds, have increased in popularity

among 401(k) participants. Recently hired participants in 2015 tended to be more likely to hold balanced funds

compared with recent hires in the past. About two-thirds of recently hired 401(k) plan participants from 2011 through

2015 held balanced funds, compared with less than half in 2006, and one-third in 2002 (Figure 35). At year-end 2015,

60 percent of recently hired 401(k) participants held target-date funds, while 11 percent held non–target-date balanced

funds, and 1 percent held both target-date and non–target-date balanced funds (Figure 36).

Among those who held balanced funds, recently hired participants in 2015 were more likely to hold a high

concentration of their accounts in balanced funds compared with past years. At year-end 2015, 80 percent of recently

hired participants holding balanced funds had more than 90 percent of their account balance invested in balanced

funds, compared with 79 percent in 2014, 61 percent in 2009, 43 percent in 2006, and 7 percent in 1998 (Figure 37).

Concentration is highest among recently hired participants with target-date funds; at year-end 2015, 82 percent of

recently hired participants holding target-date funds held more than 90 percent of their account balance in target-date

funds (Figure 38). Fifty-four percent of recently hired participants holding non–target-date balanced funds had more

than 90 percent of their account balance invested in those funds at year-end 2015.

Balanced fund, target-date fund, and non–target-date balanced fund use varied somewhat by age among recently hired

participants—recently hired participants in their 20s were more likely to be highly concentrated in such funds. For

example, 60 percent of recently hired participants in their 20s held more than 90 percent of their account balances in

balanced funds, compared with 53 percent of recent hires in their 40s, and 50 percent of recent hires in their 60s in

2015 (Figure 39). Concentrated target-date fund use ranged from 54 percent of recent hires in their 20s holding more

than 90 percent of their account balances in target-date funds to 43 percent of recently hired participants in their 60s.

In addition, at year-end 2015, 58 percent of the account balances of recently hired participants in their 20s were

invested in balanced funds, compared with 54 percent in 2012, 42 percent in 2009, 24 percent in 2006, and about

7 percent among that age group in 1998 (Figure 40).41 At year-end 2015, among recently hired participants in their

20s, target-date funds accounted for 83 percent of their balanced fund assets, or 48 percent of their account balances

overall. The pattern of target-date and non–target-date balanced fund use varied with participant age.

Comparing recently hired participants in 2015 with similar age groups in 1998 also illustrates that asset allocation to

balanced funds tended to be higher in 2015 than in 1998, rising from 9 percent of the account balances of recently

hired participants in 1998 to 41 percent in 2015 (Figure 40). The share of account balances invested in equity funds

decreased over the same period, from 65 percent for recently hired participants in 1998 to 38 percent for recently hired

participants in 2015. Company stock also declined for the two groups of recently hired participants, from 9 percent of

401(k) plan account balances in 1998 to 2 percent in 2015.

In addition to devoting a greater share of their assets to balanced funds, recently hired participants also have become

more likely to hold these diversified investment options. At year-end 2015, 70 percent of recently hired 401(k)

participants held balanced funds, compared with 29 percent at year-end 1998 (Figure 35). Over the same period,

recently hired 401(k) participants have become less likely to hold company stock (Figure 41) and less likely to hold

equity funds.42 Recently hired 401(k) participants also tend not to hold a high concentration of their account balances in

company stock (Figures 42 and 43).43


b Components may not add to 100 percent because of rounding.

a Participants include the 26.1 million 401(k) plan participants in the year-end 2015 EBRI/ICI 401(k) database and the 21.8 million 401(k) plan participants in the year-end 2007 EBRI/ICI database.

c Equities include equity funds, company stock, and the equity portion of balanced funds. Funds include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated.

Figure 31Exposure to Equities Increased Among 401(k)

Participants Between 2007 and 2015Percentage of 401(k) participants by age of participant, a, b year-end 2007 and year-end 2015

19.2

6.910.9 7.0 10.8 7.6

12.2 8.717.7

12.7 13.28.5

2.4

0.6

2.5

1.4

3.4

2.3

5.03.8

7.1

5.7 3.8

2.7

3.8

1.23.9

2.24.7

3.2

6.3

5.2

9.714.2

5.3

4.7

7.0

3.3

7.9

5.0

9.1

6.7

17.622.7

17.230.4

11.2

12.5

19.1

12.6

19.9

14.5

28.4

33.4

23.833.9

18.1

16.4

23.024.1

48.5

75.3

54.9

69.9

43.7 46.7

35.125.7

30.120.6

43.547.5

Age Group

>80 percent >60 to 80 percent >40 to 60 percent >20 to 40 percent 1 to 20 percent Zero

Percentage of account balance invested in equitiesc

2007 2007 2007 2007 2007 20072015 2015 2015 2015 2015 2015

20s 30s 40s 50s 60s All


Percentage of Account Balance Invested in Balanced FundsAgeGroup Zero 1–10% >10–20% >20–30% >30–40% >40–50% >50–60% >60–70% >70–80% >80–90% >90–100%20s 28.1% 1.8% 1.6% 1.6% 1.3% 1.4% 2.0% 1.3% 1.3% 1.1% 58.4%30s 35.2% 3.7% 3.1% 2.9% 2.1% 1.9% 2.2% 1.5% 1.6% 1.7% 44.0%40s 40.9% 5.1% 4.2% 3.7% 2.5% 2.2% 2.1% 1.5% 1.6% 1.7% 34.6%50s 43.4% 5.7% 4.5% 4.0% 2.7% 2.3% 2.1% 1.5% 1.5% 1.6% 30.7%60s 46.1% 5.5% 4.1% 3.8% 2.6% 2.3% 2.0% 1.4% 1.4% 1.5% 29.4%All 39.2% 4.5% 3.6% 3.3% 2.3% 2.1% 2.1% 1.5% 1.5% 1.6% 38.5%

Percentage of Account Balance Invested in Target-date Fundsc

AgeGroup Zero 1–10% >10–20% >20–30% >30–40% >40–50% >50–60% >60–70% >70–80% >80–90% >90–100%20s 37.1% 1.2% 1.1% 1.2% 1.0% 1.2% 1.8% 1.2% 1.1% 1.0% 52.1%30s 44.9% 2.6% 2.1% 2.0% 1.6% 1.5% 1.8% 1.3% 1.4% 1.5% 39.2%40s 52.6% 3.6% 2.6% 2.3% 1.7% 1.6% 1.6% 1.2% 1.3% 1.5% 30.0%50s 55.9% 4.1% 2.7% 2.4% 1.8% 1.6% 1.5% 1.1% 1.2% 1.4% 26.4%60s 58.6% 3.9% 2.5% 2.2% 1.6% 1.5% 1.4% 1.0% 1.1% 1.2% 25.1%All 50.5% 3.2% 2.3% 2.1% 1.6% 1.5% 1.6% 1.2% 1.2% 1.4% 33.6%

Percentage of Account Balance Invested in Non–Target-date Balanced FundsAgeGroup Zero 1–10% >10–20% >20–30% >30–40% >40–50% >50–60% >60–70% >70–80% >80–90% >90–100%20s 89.7% 1.4% 0.9% 0.7% 0.4% 0.3% 0.2% 0.2% 0.2% 0.1% 5.9%30s 88.0% 2.6% 1.8% 1.3% 0.6% 0.5% 0.4% 0.2% 0.2% 0.2% 4.3%40s 85.5% 3.3% 2.5% 1.8% 0.9% 0.6% 0.5% 0.3% 0.2% 0.2% 4.2%50s 84.7% 3.5% 2.7% 2.1% 1.1% 0.8% 0.6% 0.3% 0.3% 0.2% 3.8%60s 84.8% 3.2% 2.6% 2.1% 1.1% 0.8% 0.6% 0.3% 0.3% 0.2% 3.8%All 86.3% 2.9% 2.2% 1.7% 0.8% 0.6% 0.5% 0.3% 0.2% 0.2% 4.4%

Figure 32Asset Allocation Distribution of 401(k) Participant

Percentage of participants,a,b 2015

Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Projecta The analysis includes the 26.1 million participants in the year-end 2015 EBRI/ICI 401(k) database.b Row percentages may not add to 100 percent because of rounding.c A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approaches and passes the target date of the fund, which is usually included in the fund’s name.Note: "Funds" include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated.

Account Balance to Balanced Funds, by Age


Tenu

re (y

ears

)Ze

ro1–

10%

11–2

0%21

–30%

31–4

0%41

–50%

51–6

0%61

–70%

71–8

0%81

–90%

91–1

00%

0–2

30.4

%1.

8%1.

8%1.

9%1.

4%1.

5%2.

1%1.

3%1.

3%1.

0%55

.4%

>2–5

32.4

%2.

7%2.

4%2.

4%1.

8%1.

8%2.

2%1.

4%1.

5%1.

5%49

.9%

>5–1

038

.6%

4.4%

3.7%

3.3%

2.4%

2.2%

2.1%

1.7%

1.7%

1.8%

38.2

%>1

0–20

46.6

%6.

9%5.

4%4.

6%3.

0%2.

5%2.

1%1.

6%1.

6%2.

3%23

.4%

>20–

3051

.5%

8.3%

6.0%

5.1%

3.3%

2.8%

2.3%

1.9%

1.9%

1.8%

15.3

%>3

055

.0%

8.5%

5.7%

4.8%

3.2%

2.6%

2.0%

1.4%

1.3%

1.3%

14.2

%A

ll39

.2%

4.5%

3.6%

3.3%

2.3%

2.1%

2.1%

1.5%

1.5%

1.6%

38.5

%

Tenu

re (y

ears

)Ze

ro1–

10%

11–2

0%21

–30%

31–4

0%41

–50%

51–6

0%61

–70%

71–8

0%81

–90%

91–1

00%

0–2

40.3

%1.

2%1.

1%1.

3%1.

0%1.

2%1.

9%1.

1%1.

1%0.

8%49

.0%

>2–5

41.9

%1.

9%1.

6%1.

7%1.

5%1.

5%1.

9%1.

2%1.

3%1.

3%44

.2%

>5–1

049

.3%

3.3%

2.5%

2.3%

1.8%

1.6%

1.7%

1.4%

1.4%

1.6%

33.0

%>1

0–20

59.2

%5.

1%3.

4%2.

7%2.

0%1.

7%1.

5%1.

2%1.

3%2.

0%19

.8%

>20–

3065

.7%

5.9%

3.5%

2.8%

2.0%

1.8%

1.6%

1.4%

1.5%

1.5%

12.5

%>3

069

.1%

6.1%

3.4%

2.6%

1.9%

1.6%

1.2%

1.0%

1.0%

1.0%

11.1

%A

ll50

.5%

3.2%

2.3%

2.1%

1.6%

1.5%

1.6%

1.2%

1.2%

1.4%

33.6

%

Tenu

re (y

ears

)Ze

ro1–

10%

11–2

0%21

–30%

31–4

0%41

–50%

51–6

0%61

–70%

71–8

0%81

–90%

91–1

00%

0–2

88.7

%1.

4%1.

2%0.

9%0.

5%0.

4%0.

3%0.

2%0.

2%0.

1%6.

1%>2

–588

.5%

1.9%

1.4%

1.1%

0.5%

0.4%

0.3%

0.2%

0.2%

0.2%

5.2%

>5–1

086

.6%

2.9%

2.1%

1.5%

0.7%

0.6%

0.5%

0.3%

0.3%

0.3%

4.4%

>10–

2084

.0%

4.1%

3.1%

2.3%

1.1%

0.8%

0.6%

0.3%

0.3%

0.3%

3.1%

>20–

3082

.4%

4.8%

3.5%

2.8%

1.4%

1.0%

0.7%

0.4%

0.3%

0.3%

2.5%

>30

82.4

%4.

7%3.

4%2.

7%1.

4%1.

0%0.

7%0.

4%0.

3%0.

3%2.

8%A

ll86

.3%

2.9%

2.2%

1.7%

0.8%

0.6%

0.5%

0.3%

0.2%

0.2%

4.4%

Sou

rce:

Tab

ulat

ions

from

EB

RI/I

CI P

artic

ipan

t-Dire

cted

Ret

irem

ent P

lan

Dat

a C

olle

ctio

n P

roje

ct.

a T

he a

naly

sis

incl

udes

the

26.1

mill

ion

401(

k) p

lan

parti

cipa

nts

in th

e ye

ar-e

nd 2

015

EB

RI/I

CI 4

01(k

) dat

abas

e 40

1k(k

) dat

abas

e. b

Row

per

cent

ages

may

not

add

to 1

00 p

erce

nt b

ecau

se o

f rou

ndin

g.

Not

e: “F

unds

” inc

lude

mut

ual f

unds

, ban

k co

llect

ive

trust

s, li

fe in

sura

nce

sepa

rate

acc

ount

s, a

nd a

ny p

oole

d in

vest

men

t pro

duct

prim

arily

inve

sted

in th

e se

curit

y in

dica

ted.

The

tenu

re v

aria

ble

is

gene

rally

yea

rs w

orki

ng a

t cur

rent

em

ploy

er, a

nd th

us m

ay o

vers

tate

yea

rs o

f par

ticip

atio

n in

the

401(

k) p

lan.

c A

targ

et-d

ate

fund

typi

cally

reba

lanc

es it

s po

rtfol

io to

bec

ome

less

focu

sed

on g

row

th a

nd m

ore

focu

sed

on in

com

e as

it a

ppro

ache

s an

d pa

sses

the

targ

et d

ate

of th

e fu

nd, w

hich

is u

sual

ly in

clud

ed in

the

fund

’s

nam

e.

Figu

re 3

3A

sset

Allo

cati

on

Dis

trib

uti

on

of

401(

k) P

arti

cip

ant

Acc

ou

nt

Bal

ance

to

Bal

ance

d F

un

ds,

by

Ten

ure

Per

cent

age

of P

artic

ipan

ts,a,

b 201

5

Per

cent

age

of A

ccou

nt B

alan

ce In

vest

ed in

Bal

ance

d Fu

nds

Per

cent

age

of A

ccou

nt B

alan

ce In

vest

ed in

Tar

get-D

ate

Fund

sc

Per

cent

age

of A

ccou

nt B

alan

ce In

vest

ed in

Non

-Tar

get-D

ate

Bal

ance

d Fu

nds



Year-End 2015 Snapshot of 401(k) Plan Loan Activity

Availability and Use of 401(k) Plan Loans by Plan Size

Fifty-three percent of the 401(k) plans for which loan data were available in the 2015 EBRI/ICI 401(k) database offered

a plan loan provision to participants (Figure 44).44 The loan feature was more commonly associated with large plans (as

measured by the number of participants in the plan). About 90 percent of plans with more than 1,000 participants

included a loan provision, compared with 30 percent of plans with 10 or fewer participants.

Participant loan activity varied modestly by plan size, ranging from 17 percent of participants with loans outstanding in

401(k) plans with 26 to 100 or 1,001 to 2,500 participants to 23 percent of participants in 401(k) plans with 10 or fewer

participants (Figure 45). Loan ratios—the amount of the loan outstanding divided by the remaining account balance—

vary only slightly when participants are grouped based on the size of their 401(k) plans (as measured by the number of

plan participants). Among those in plans with 100 or fewer participants, the loan ratio was 14 percent of the remaining

assets in 2015, while in plans with more than 5,000 participants the loan ratio was 11 percent (Figure 46).

In the 20 years that the database has been tracking loan activity among 401(k) plan participants, there has been little

variation. From 1996 through 2008, on average, less than one-fifth of 401(k) participants with access to loans had

loans outstanding. At year-end 2009, the percentage of participants who were offered loans with loans outstanding

ticked up to 21 percent and remained at that level from year-end 2010 through year-end 2013 before falling to

20 percent at year-end 2014 and 18 percent at year-end 2015 (Figure 47).45 However, not all participants have access

to 401(k) plan loans—factoring in all 401(k) participants with and without loan access in the database, only 16 percent

had loans outstanding at year-end 2015.46 On average, over the past 20 years, among participants with loans

outstanding, about 14 percent of the remaining account balance remained unpaid. U.S. Department of Labor data

indicate that loan amounts tend to be a negligible portion of plan assets.47

401(k) Plan Loan Activity Varies with Participant Age, Tenure, Account Balance, and Salary

In the 2015 EBRI/ICI 401(k) database, 87 percent of participants were in plans offering loans. However, as has been

the case for the 20 years that the database has tracked 401(k) plan participants, relatively few participants made use of

this borrowing privilege. At year-end 2015, 18 percent of those eligible for loans had 401(k) plan loans outstanding

(Figure 47). As in previous years, loan activity varies with age, tenure, account balance, and salary. Of those

participants in plans offering loans, the highest percentages of participants with outstanding loan balances were among

participants in their 30s, 40s, or 50s (Figure 48). In addition, participants with five or fewer years of tenure or with

more than 30 years of tenure were less likely to use the loan provision than other participants. Eleven percent of

participants with account balances of less than $10,000 had loans outstanding.

Average Loan Balances

Among participants with outstanding 401(k) loans at the end of 2015, the average unpaid balance was $7,982,

compared with $7,780 in the year-end 2014 database (Figure 49). The median loan balance outstanding was $4,359 at

year-end 2015, compared with $4,239 in the year-end 2014 database. The ratio of the loan outstanding to the

remaining account balance increased slightly, from 11 percent at year-end 2014 to 12 percent at year-end 2015

(Figures 47 and 50). In addition, as in previous years, variation around this average tends to correspond with age (the

older the participant, the lower the average), tenure (the higher the tenure of the participant, the lower the average),

account balance (the higher the account balance, the lower the average),48 and salary (the higher the participant’s

salary, the lower the average) (Figure 50).

Overall, loans from 401(k) plans tended to be small, with a sizable majority of eligible 401(k) participants in all age

groups having no loan outstanding at all. For example, 92 percent of participants in their 20s, 76 percent of participants

in their 40s, and 87 percent of participants in their 60s had no loans outstanding at year-end 2015 (Figure 51).

Age

Gro

upZe

ro1–

10%

11–2

0%21

–30%

31–4

0%41

–50%

51–6

0%61

–70%

71–8

0%81

–90%

91–1

00%

20s

73.9

%5.

0%3.

8%3.

4%2.

3%1.

6%1.

6%0.

9%0.

6%0.

4%6.

6%30

s59

.5%

12.2

%6.

8%4.

6%3.

1%2.

3%2.

1%1.

5%1.

0%0.

7%6.

2%40

s53

.6%

13.9

%8.

1%5.

4%3.

8%2.

8%2.

3%1.

6%1.

1%0.

9%6.

5%50

s51

.4%

15.2

%8.

3%5.

4%3.

8%2.

8%2.

3%1.

6%1.

2%0.

9%7.

1%60

s54

.2%

14.4

%7.

5%4.

9%3.

4%2.

5%2.

1%1.

5%1.

1%0.

9%7.

5%Al

l57

.5%

12.6

%7.

1%4.

8%3.

4%2.

5%2.

1%1.

5%1.

1%0.

8%6.

7%S

ourc

e: T

abul

atio

ns fr

om E

BR

I/IC

I Par

ticip

ant-D

irect

ed R

etire

men

t Pla

n D

ata

Col

lect

ion

Pro

ject

.a Th

e an

alys

is in

clud

es th

e 8

.5 m

illio

n pa

rtici

pant

s in

pla

ns w

ith c

ompa

ny s

tock

at y

ear-

end

2015

.b R

ow p

erce

ntag

es m

ay n

ot a

dd u

p to

100

per

cent

bec

ause

of r

ound

ing.

Figu

re 3

4A

sset

All

oca

tio

n D

istr

ibu

tio

n o

f 40

1(k)

Par

tici

pan

t A

cco

un

t B

alan

ce t

o

Co

mp

any

Sto

ck i

n 4

01(k

) P

lan

s W

ith

Co

mp

any

Sto

ck,

by

Par

tici

pan

t A

ge

Perc

enta

ge o

f Par

ticip

ants

,a,b 2

015

Perc

enta

ge o

f Acc

ount

Bal

ance

Inve

sted

in C

ompa

ny S

tock

Age

G

roup

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

20s

27.0

%28

.3%

27.1

%27

.3%

32.7

%35

.1%

38.9

%43

.5%

48.5

%51

.1%

63.6

%64

.1%

69.6

%72

.0%

70.8

%67

.6%

68.1

%72

.7%

30s

29.0

%31

.0%

28.3

%26

.5%

33.1

%36

.2%

39.8

%42

.8%

47.9

%54

.2%

59.6

%61

.2%

63.0

%68

.1%

69.5

%67

.8%

67.5

%69

.9%

40s

30.5

%33

.6%

30.8

%27

.9%

33.7

%35

.7%

39.8

%42

.1%

46.6

%52

.8%

57.8

%59

.3%

59.9

%65

.0%

67.2

%65

.6%

67.6

%68

.3%

50s

30.9

%34

.9%

32.1

%29

.2%

33.9

%35

.5%

40.3

%43

.3%

47.8

%53

.4%

58.0

%58

.7%

59.1

%64

.2%

66.7

%64

.5%

65.6

%67

.0%

60s

28.4

%34

.9%

33.2

%29

.1%

30.2

%30

.7%

36.3

%41

.6%

45.5

%50

.1%

53.9

%53

.6%

55.2

%60

.7%

63.9

%60

.6%

63.9

%63

.6%

All

28.9

%31

.3%

29.1

%27

.4%

33.0

%35

.4%

39.3

%42

.8%

47.6

%52

.7%

59.9

%60

.9%

63.0

%67

.5%

68.6

%66

.3%

67.2

%69

.6%

So

urce

: T

abul

atio

ns fr

om

EB

RI/I

CI P

artic

ipan

t-D

irect

ed R

etire

men

t Pla

n D

ata

Co

llect

ion

Pro

ject

.a T

he a

naly

sis

incl

udes

par

ticip

ants

with

two

or f

ewer

yea

rs o

f ten

ure

in th

e ye

ar in

dica

ted.

b "B

alan

ced

fund

s” in

clud

e m

utua

l fun

ds, b

ank

colle

ctiv

e tr

usts

, life

insu

ranc

e se

para

te a

cco

unts

, and

any

po

ole

d in

vest

men

t pro

duct

prim

arily

inve

sted

in a

mix

of e

quiti

es a

nd fi

xed-

inco

me

secu

ritie

s.

Figu

re 3

5M

an

y R

ece

ntl

y H

ire

d 4

01(k

) P

lan

Part

icip

an

tsa H

old

Bala

nce

d F

un

ds

b

Per

cent

age

of re

cent

ly h

ired

401(

k) p

artic

ipan

tsa

hold

ing

bala

nced

fund

s,b

1998

–201

5


Age

Gro

up20

0620

0720

0820

0920

1020

1120

1220

1320

1420

15

20s

48.5

%51

.1%

63.6

%64

.1%

69.6

%72

.0%

70.8

%67

.6%

68.1

%72

.7%

30s

47.9

%54

.2%

59.6

%61

.2%

63.0

%68

.1%

69.5

%67

.8%

67.5

%69

.9%

40s

46.6

%52

.8%

57.8

%59

.3%

59.9

%65

.0%

67.2

%65

.6%

67.6

%68

.3%

50s

47.8

%53

.4%

58.0

%58

.7%

59.1

%64

.2%

66.7

%64

.5%

65.6

%67

.0%

60s

45.5

%50

.1%

53.9

%53

.6%

55.2

%60

.7%

63.9

%60

.6%

63.9

%63

.6%

All

47.6

%52

.7%

59.9

%60

.9%

63.0

%67

.5%

68.6

%66

.3%

67.2

%69

.6%

Age

Gro

up20

0620

0720

0820

0920

1020

1120

1220

1320

1420

15

20s

29.4

%32

.4%

47.5

%50

.5%

55.3

%59

.3%

59.4

%58

.6%

60.6

%64

.0%

30s

28.5

%35

.5%

44.3

%48

.3%

49.8

%55

.9%

58.7

%58

.2%

59.7

%61

.0%

40s

27.4

%34

.6%

42.6

%46

.6%

47.2

%52

.8%

55.8

%54

.8%

57.7

%57

.8%

50s

28.1

%35

.3%

42.7

%46

.2%

46.8

%52

.4%

55.5

%53

.6%

57.0

%55

.9%

60s

26.1

%32

.3%

39.1

%41

.8%

43.1

%49

.0%

51.5

%48

.9%

55.4

%51

.0%

All

28.3

%34

.3%

44.4

%47

.9%

49.8

%55

.2%

57.3

%56

.3%

58.9

%59

.7%

Age

Gro

up20

0620

0720

0820

0920

1020

1120

1220

1320

1420

15

20s

22.5

%21

.2%

18.5

%16

.7%

15.8

%14

.0%

12.8

%10

.1%

8.6%

9.7%

30s

22.5

%21

.9%

18.2

%16

.2%

15.1

%14

.0%

12.6

%11

.2%

11.9

%10

.4%

40s

21.3

%21

.1%

17.7

%15

.8%

14.4

%13

.9%

13.3

%12

.4%

14.8

%12

.0%

50s

21.4

%20

.9%

17.6

%15

.4%

13.8

%13

.5%

13.0

%12

.4%

13.3

%12

.4%

60s

19.8

%20

.1%

16.7

%14

.0%

13.2

%13

.1%

13.9

%13

.0%

13.1

%13

.5%

All

21.9

%21

.3%

18.0

%16

.1%

14.8

%13

.9%

13.0

%11

.4%

11.8

%11

.3%

Sou

rce:

Tab

ulat

ions

from

EB

RI/I

CI P

artic

ipan

t-D

irect

ed R

etire

men

t Pla

n D

ata

Col

lect

ion

Pro

ject

.a

A ta

rget

-dat

e fu

nd ty

pica

lly r

ebal

ance

s its

por

tfolio

to b

ecom

e le

ss fo

cuse

d on

gro

wth

and

mor

e fo

cuse

d on

inco

me

as it

app

roac

hes

and

pass

es th

e ta

rget

dat

e of

the

fund

, whi

ch is

usu

ally

incl

uded

in th

e fu

nd’s

nam

e.

Not

e: T

he a

naly

sis

incl

udes

the

4.8

mill

ion

rece

ntly

hire

d pa

rtic

ipan

ts (

thos

e w

ith tw

o or

few

er y

ears

of t

enur

e) in

201

5, th

e 4.

1 m

illio

n re

cent

ly h

ired

part

icip

ants

in 2

014,

th

e 4.

4 m

illio

n re

cent

ly h

ired

part

icip

ants

in 2

013,

the

3.6

mill

ion

rece

ntly

hire

d pa

rtic

ipan

ts i

n 20

12, t

he 3

.4 m

illio

n re

cent

ly h

ired

part

icip

ants

in 2

011,

the

3.2

mill

ion

rece

ntly

hi

red

part

icip

ants

in 2

010,

the

3.1

mill

ion

rece

ntly

hire

d pa

rtic

ipan

ts in

200

9, th

e 4.

0 m

illio

n re

cent

ly h

ired

part

icip

ants

in 2

008,

the

3.8

mill

ion

rece

ntly

hire

d pa

rtic

ipan

ts in

20

07, a

nd th

e 2.

8 m

illio

n re

cent

ly h

ired

part

icip

ants

in 2

006.

"Fun

ds"

incl

ude

mut

ual f

unds

, ban

k co

llect

ive

trus

ts, l

ife in

sura

nce

sepa

rate

acc

ount

s, a

nd a

ny p

oole

d in

vest

men

t pro

duct

prim

arily

inve

sted

in th

e se

curit

y in

dica

ted.

Fig

ure

36

Man

y R

ecen

tly

Hir

ed 4

01(k

) P

lan

Par

tici

pan

ts H

old

Tar

get

-Dat

ea B

alan

ced

Fu

nd

s

Per

cent

age

of r

ecen

tly h

ired

part

icip

ants

, 200

6,

20

07, 2

008,

200

9, 2

010,

201

1, 2

012,

201

3, 2

014,

and

201

5

Ho

ldin

g B

alan

ced

Fu

nd

s

Ho

ldin

g T

arg

et-D

ate

Fu

nd

sa

Ho

ldin

g N

on

-Tar

get

-Dat

e F

un

ds


Age Group >0–50 percent >50–90 percent >90 percent20s 84.9% 7.3% 7.8%30s 86.0% 7.6% 6.4%40s 84.1% 8.9% 7.0%50s 81.1% 10.7% 8.2%60s 77.0% 12.4% 10.6%All 84.5% 8.2% 7.3%





Figure 37

Many Recently Hired 401(k) Participants Hold High Concentrations in Balanced FundsPercentage of recently hired participants holding

balanced fund assets,a,b selected years

2009

Percentage of Account Balance Invested in Balanced Funds

2006

2008

1998

2007

((more))









b Row percentages may not add to 100 percent because of rounding.

a The analysis includes the 0.4 million recently hired participants (those with two or fewer years of tenure) holding balanced funds in 1998; the 1.4 million recently hired participants holding balanced funds in 2006; the 2.0 million recently hired participants holding balanced funds in 2007; the 2.4 million recently hired participants holding balanced funds in 2008; the 1.9 million recently hired participants holding balanced funds in 2009; the 2.0 million recently hired participants holding balanced funds in 2010; the 2.3 million recently hired participants holding balanced funds in 2011; the 2.5 million recently hired participants holding balanced funds in 2012; the 2.9 million recently hired participants holding balanced funds in 2013, and the 2.8 million recently hired participants holding balanced funds in 2014, and the 3.3 million recently hired participants holding balanced funds in 2015.

Note: “Balanced funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in a mix of equities and fixed-income securities.

2010

2013

2011

2012

2014

2015

Figure 37 (Cont'd.)








c Row percentages may not add to 100 percent because of rounding.

Percentage of Account Balance Invested in Non-Target-Date Balanced Funds

a A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approaches and passes the target date of the fund, which is usually included in the fund’s name. b The analysis includes the 3.3 million recently hired participants (those with two or fewer years of tenure) holding balanced funds in 2015, the 2.9 million recently hired participants holding target-date funds in 2015; and the 0.5 million recently hired participants holding non-target-date balanced funds in 2015.

Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated.

Figure 38Many Recently Hired 401(k) Participants Hold

High Concentrations in Target-Date Fundsa

Percentage of recently hired 401(k) participants holding the type of fund indicated,b, c 2015

Percentage of Account Balance Invested in Target-Date Fundsa


Age

Gro

upZe

ro1–

10%

11–2

0%21

–30%

31–4

0%41

–50%

51–6

0%61

–70%

71–8

0%81

–90%

91–1

00%

20s

27.4

%1.

4%1.

4%1.

4%1.

1%1.

3%2.

2%1.

4%1.

4%1.

0%60

.2%

30s

30.1

%1.

9%1.

9%1.

9%1.

5%1.

5%2.

3%1.

4%1.

5%1.

1%54

.9%

40s

31.7

%2.

1%2.

2%2.

2%1.

6%1.

6%2.

0%1.

2%1.

3%1.

0%53

.1%

50s

33.0

%2.

1%2.

2%2.

4%1.

5%1.

7%1.

8%1.

1%1.

2%0.

9%52

.2%

60s

36.4

%2.

2%2.

1%2.

2%1.

4%1.

6%1.

7%0.

8%0.

9%0.

8%49

.8%

All

30.4

%1.

8%1.

8%1.

9%1.

4%1.

5%2.

1%1.

3%1.

3%1.

0%55

.4%

Age

Gro

upZe

ro1–

10%

11–2

0%21

–30%

31–4

0%41

–50%

51–6

0%61

–70%

71–8

0%81

–90%

91–1

00%

20s

36.0

%0.

9%0.

9%1.

0%0.

9%1.

1%2.

1%1.

2%1.

2%0.

8%53

.9%

30s

39.0

%1.

2%1.

3%1.

4%1.

1%1.

2%2.

1%1.

3%1.

4%0.

9%49

.1%

40s

42.2

%1.

3%1.

3%1.

5%1.

2%1.

2%1.

8%1.

0%1.

1%0.

8%46

.5%

50s

44.1

%1.

3%1.

2%1.

4%1.

1%1.

2%1.

5%0.

9%1.

0%0.

7%45

.6%

60s

48.6

%1.

3%1.

0%1.

2%0.

9%1.

0%1.

2%0.

6%0.

7%0.

6%42

.8%

All

40.3

%1.

2%1.

1%1.

3%1.

0%1.

2%1.

9%1.

1%1.

1%0.

8%49

.0%

Age

Gro

upZe

ro1–

10%

11–2

0%21

–30%

31–4

0%41

–50%

51–6

0%61

–70%

71–8

0%81

–90%

91–1

00%

20s

90.3

%1.

1%0.

8%0.

6%0.

3%0.

3%0.

2%0.

2%0.

2%0.

1%6.

0%30

s89

.6%

1.4%

1.1%

0.9%

0.5%

0.4%

0.2%

0.2%

0.2%

0.1%

5.4%

40s

88.0

%1.

5%1.

4%1.

1%0.

6%0.

4%0.

3%0.

2%0.

2%0.

1%6.

3%50

s87

.6%

1.5%

1.5%

1.3%

0.6%

0.5%

0.4%

0.2%

0.2%

0.1%

6.2%

60s

86.5

%1.

5%1.

5%1.

4%0.

7%0.

7%0.

5%0.

2%0.

2%0.

2%6.

6%A

ll88

.7%

1.4%

1.2%

0.9%

0.5%

0.4%

0.3%

0.2%

0.2%

0.1%

6.1%

Sou

rce:

Tab

ulat

ions

from

EB

RI/I

CI P

artic

ipan

t-Dire

cted

Ret

irem

ent P

lan

Dat

a C

olle

ctio

n P

roje

ct.

a T

he a

naly

sis

incl

udes

the

4.8

mill

ion

rece

ntly

hire

d pa

rtici

pant

s (th

ose

with

two

or fe

wer

yea

rs o

f ten

ure)

in 2

015.

b R

ow p

erce

ntag

es m

ay n

ot a

dd to

100

per

cent

bec

ause

of r

ound

ing.

Not

e: “F

unds

” inc

lude

mut

ual f

unds

, ban

k co

llect

ive

trust

s, li

fe in

sura

nce

sepa

rate

acc

ount

s, a

nd a

ny p

oole

d in

vest

men

t pro

duct

prim

arily

inve

sted

in th

e se

curit

y in

dica

ted.

Per

cent

age

of A

ccou

nt B

alan

ce In

vest

ed in

Non

-Tar

get-D

ate

Bal

ance

d Fu

nds

c A

targ

et-d

ate

fund

typi

cally

reba

lanc

es it

s po

rtfol

io to

bec

ome

less

focu

sed

on g

row

th a

nd m

ore

focu

sed

on in

com

e as

it a

ppro

ache

s an

d pa

sses

the

targ

et d

ate

of th

e fu

nd, w

hich

is u

sual

ly in

clud

ed in

the

fund

’s

nam

e.

Figu

re 3

9A

sset

Allo

cati

on

Dis

trib

uti

on

of

401(

k) P

lan

Acc

ou

nt

Bal

ance

to

B

alan

ced

Fu

nd

s A

mo

ng

Rec

entl

y H

ired

Par

tici

pan

ts, b

y P

arti

cip

ant

Ag

e

Per

cent

age

of R

ecen

tly H

ired

Par

ticip

ants

,a,b 2

015

Per

cent

age

of A

ccou

nt B

alan

ce In

vest

ed in

Bal

ance

d Fu

nds

Per

cent

age

of A

ccou

nt B

alan

ce In

vest

ed in

Tar

get-D

ate

Fund

sc


Non

-Tar

get-

Tar

get-

date

date

bal

an-

Age

fu

ndsc

ced

fund

s

Gro

up19

9820

1519

9820

1520

1520

1519

9820

1519

9820

1519

9820

1519

9820

15

20s

66.9

%28

.5%

7.4%

58.0

%48

.1%

9.9%

5.1%

4.6%

4.0%

1.1%

3.7%

0.9%

10.5

%3.

0%

30s

67.8

%37

.0%

8.0%

47.8

%41

.1%

6.7%

5.1%

5.1%

4.1%

1.6%

3.2%

1.4%

9.4%

2.1%

40s

64.5

%40

.7%

9.7%

41.2

%34

.8%

6.4%

5.9%

6.8%

5.1%

2.4%

4.4%

1.3%

8.0%

1.8%

50s

60.5

%38

.8%

11.3

%37

.6%

31.1

%6.

4%6.

6%10

.2%

5.9%

3.7%

6.7%

1.7%

6.5%

1.4%

60s

50.0

%34

.5%

12.1

%31

.6%

24.8

%6.

8%8.

7%16

.0%

7.8%

6.4%

13.3

%1.

8%5.

7%0

.9%

All

64.8

%37

.5%

9.1%

41.2

%34

.1%

7.1%

5.7%

8.6%

4.9%

3.3%

4.6%

1.4%

8.6%

1.7%

Sou

rce:

Tab

ulat

ions

from

EB

RI/I

CI P

artic

ipan

t-D

irec

ted

Ret

irem

ent P

lan

Dat

a C

olle

ctio

n P

roje

ct.

a T

he a

naly

sis

is b

ased

on

sam

ples

of 1

.2 m

illio

n pa

rtic

ipan

ts w

ith tw

o or

few

er y

ears

of t

enur

e in

199

8 an

d 4.

8 m

illio

n pa

rtic

ipan

ts w

ith tw

o or

few

er y

ears

of t

enur

e in

201

5.b M

inor

inve

stm

ent o

ptio

ns a

re n

ot s

how

n; th

eref

ore,

row

per

cent

age

s w

ill n

ot a

dd to

100

per

cent

. Per

cent

ages

are

dol

lar-

wei

ghte

d av

erag

es.

c A

targ

et-d

ate

fund

typi

cally

reb

alan

ces

its p

ortfo

lio to

bec

ome

less

focu

sed

on g

row

th a

nd m

ore

focu

sed

on in

com

e as

it a

ppro

ache

s an

d pa

sses

the

targ

et d

ate

of th

e fu

nd, w

hich

is u

sual

ly in

clud

ed in

the

fund

’s n

ame.

d G

ICs

are

guar

ante

ed in

vest

men

t con

trac

ts.

Not

e: “

Fun

ds”

incl

ude

mut

ual f

unds

, ban

k co

llect

ive

trus

ts, l

ife in

sura

nce

sepa

rate

acc

ount

s, a

nd a

ny p

oole

d in

vest

men

t pro

duct

pri

mar

ily in

vest

ed in

the

secu

rity

indi

cate

d.

Fig

ure

40

Ave

rag

e A

sset

Allo

cati

on

of

401(

k) P

lan

Acc

ou

nts

, by

Par

tici

pan

t A

ge

Am

on

g

R

ecen

tly

Hir

ed 4

01(k

) P

lan

Par

tici

pan

ts W

ith

Tw

o o

r F

ewer

Yea

rs o

f T

enu

reP

erce

ntag

e of

acc

ount

bal

ance

s,b 1

998

and

2015

Bal

ance

d F

unds

Com

pany

Fun

dsT

otal

Fun

dsF

unds

Sta

ble-

Val

ue F

unds

Sto

ck

Equ

ity

Bon

dM

oney

GIC

sd and

Oth

er

Age G

roup

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

20

11

2012

2013

2014

2015

20s

60.8

%61.1

%60.5

%58.1

%53.9

%49.6

%49.8

%45.4

%40.0

%35.4

%32.9

%32.3

%30.3

%26.2

%23.0

%27.9

%26.9

%24.4

%

30s

61.9

%62.3

%61.6

%60.0

%57.2

%53.3

%52.3

%47.6

%43.6

%40.4

%37.4

%36.2

%33.6

%30.0

%26.4

%30.7

%29.2

%27.4

%

40s

59.8

%60.6

%59.5

%58.8

%55.9

%52.6

%52.0

%47.3

%43.6

%40.7

%37.9

%37.0

%34.4

%31.4

%27.5

%31.3

%29.1

%26.7

%

50s

57.6

%58.8

%57.4

%57.9

%53.9

%51.2

%49.5

%45.2

%42.3

%39.6

%37.8

%37.6

%34.4

%31.3

%26.9

%30.8

%29.1

%25.7

%

60s

54.1

%55.5

%53.6

%55.7

%51.0

%49.5

%47.8

%43.9

%40.4

%38.4

%38.7

%40.5

%36.8

%30.8

%26.7

%30.0

%27.6

%23.3

%

All

60.5

%61.0

%60.0

%58.7

%55.3

%51.6

%51.0

%46.3

%42.0

%38.7

%36.2

%35.5

%33.0

%29.3

%25.7

%29.9

%28.3

%25.7

%S

ourc

e:

Tab

ula

tio

ns

fro

m E

BR

I/IC

I Pa

rtic

ipa

nt-

Dir

ec

ted

Re

tire

me

nt

Pla

n D

ata

Co

llecti

on P

roje

ct.

Re

ce

ntl

y H

ire

d 4

01(k

) P

art

icip

an

ts T

en

d t

o B

e L

ess L

ike

ly t

o H

old

Co

mp

an

y S

tock

Fig

ure

41

Perc

enta

ge o

f re

cently h

ired p

art

icip

ants

offe

red a

nd h

old

ing c

om

pany s

tock,

by p

art

icip

ant

age,1

998–2015

No

te: T

he

an

aly

sis

inc

lud

es

40

1(k)

pla

n p

art

icip

an

ts w

ith t

wo

or fe

we

r ye

ars

of

tenu

re in

th

e y

ear

ind

ica

ted

an

d in

a p

lan

off

erin

g c

om

pa

ny

sto

ck

as a

n in

ve

stm

en

t o

pti

on

.


12.4

%

13.5

%

12.9

%

11.6

%

8.4%

7.5%

6.4%

5.5%

4.5%

4.0%

4.3%

3.9% 5.

1%

4.0% 5.

6% 6.4%

6.1%

6.3%

8.9%

10.3

%

10.3

%

11.1

%

8.3%

8.4%

8.2%

5.7%

4.8%

3.9% 3.8%

4.1%

4.1%

3.4% 2.

8%

3.7%

3.3%

2.6%

0%

5%

10%

15%

20%

25%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

>50-90%

>90%

21.3%

23.8%23.2%

16.7%

14.6%

11.2%

Share of Participant's Account Balance Held in Company Stock

7.4%7.9%

22.7%

15.9%

9.3%

Figure 42New 401(k) Participants Tend Not to Hold High Concentrations in Company Stock

Percentage of recently hired participants offered company stock holding the percentage of their account balance indicated in company stock, 1998–2015

8.1% 8.0%

9.2%

4

9.4% 8.9%8.4%

10.1%

Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project.Note: The analysis includes 401(k) plan participants with two or fewer years of tenure in the year indicated and in a plan offering company stock as an investment option.

AgeGroup Zero 1–10% 11–20% 21–30% 31–40% 41–50% 51–60% 61–70% 71–80% 81–90% 91–100%

20s 75.6% 4.2% 3.5% 3.6% 2.1% 1.4% 1.4% 0.6% 0.4% 0.2% 7.0%30s 72.6% 6.1% 4.6% 4.5% 2.3% 1.6% 1.4% 0.6% 0.4% 0.3% 5.7%40s 73.3% 5.9% 4.8% 3.9% 2.2% 1.5% 1.4% 0.6% 0.4% 0.3% 5.6%50s 74.3% 5.6% 4.4% 3.6% 2.0% 1.3% 1.4% 0.5% 0.3% 0.2% 6.3%60s 76.7% 4.4% 3.6% 2.9% 1.7% 1.1% 1.2% 0.4% 0.3% 0.2% 7.3%All 74.3% 5.2% 4.1% 3.8% 2.2% 1.4% 1.4% 0.6% 0.4% 0.3% 6.3%

Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project.a The analysis includes the 1.3 million participants with two or fewer years of tenure in 2015 and in plans offering company stock as an investment option.b Row percentages may not add to 100 percent because of rounding.

Figure 43Asset Allocation Distribution of Recently Hired 401(k) Participant Account Balance

to Company Stock in 401(k) Plans With Company Stock, by Participant AgePercentage of recently hired participants in plans

offering company stock as an investment option,a,b 2015Percentage of Account Balance Invested in Company Stock


23%

18% 17% 17% 18% 18% 18% 17% 18% 19% 19% 18%

Number of Participants in Plan

Figure 45Percentage of Eligible 401(k) Plan Participants

With 401(k) Plan Loans, by Plan Size, 2015



14%

13% 13% 13%

12% 12%

11% 11%

12%

1–100 101–250 251–500 501–1,000 1,001–2,500 2,501–5,000 5,001–10,000 >10,000 All Plans

Number of Participants in Plan

Figure 46401(k) Loan Balances as a Percentage of 401(k) Plan Account

Balances for Participants With 401(k) Loans, by Plan Size, 2015


18% 18%17%

19%18% 18%

21% 21% 21% 21% 21%20%

18%

16%

14%

16%

13%12%

16%15%

14% 14%13%

12%11%

12%

1996 2000 2002 2005 2007 2008 2009 2010 2011 2012 2013 2014 2015

Figure 47Few 401(k) Participants Had Outstanding 401(k) Loans;

Loans Tended to Be Small, Selected Years

Percentage of eligible 401(k) participants with outstanding 401(k) loans

Loan as a percentage of the remaining 401(k) account balance

Source: Tabulations from the EBRI/ICI 401(k) Participant-Directed Retirement Plan Data Collection Project.


1996

2000

2002

2005

2007

2008

2009

2010

2011

2012

2013

2014

2015

All

18%

18%

17%

19%

18%

18%

21%

21%

21%

21%

21%

20%

18%

Age

Gro

up20

s12

%11

%10

%11

%10

%10

%13

%13

%13

%13

%12

%11

%8%

30s

20%

19%

18%

20%

20%

20%

23%

23%

22%

23%

23%

22%

19%

40s

22%

21%

20%

22%

22%

22%

26%

26%

25%

26%

27%

26%

24%

50s

17%

17%

17%

19%

19%

19%

22%

22%

22%

23%

23%

23%

21%

60s

9%9%

9%10

%10

%11

%12

%13

%13

%14

%14

%13

%13

%Te

nure

(yea

rs)

0–2

6%5%

4%5%

7%6%

9%7%

5%6%

9%9%

8%>2

–515

%14

%12

%14

%15

%15

%17

%18

%18

%18

%19

%19

%17

%>5

–10

24%

23%

21%

22%

23%

23%

25%

27%

26%

27%

28%

26%

24%

>10–

2027

%26

%26

%26

%26

%26

%29

%29

%29

%30

%30

%28

%27

%>2

0–30

25%

26%

25%

24%

24%

25%

27%

26%

26%

28%

28%

26%

25%

>30

13%

16%

15%

17%

17%

18%

19%

19%

19%

20%

20%

18%

17%

Acc

ount

Siz

e<$

10,0

0012

%11

%11

%12

%11

%12

%16

%16

%15

%15

%14

%13

%11

%$1

0,00

0–$2

0,00

026

%23

%22

%26

%25

%26

%28

%29

%30

%30

%30

%28

%26

%>$

20,0

00–$

30,0

0026

%25

%22

%27

%26

%26

%28

%29

%30

%31

%31

%30

%28

%>$

30,0

00–$

40,0

0025

%25

%23

%26

%26

%26

%28

%28

%29

%30

%31

%30

%28

%>$

40,0

00–$

50,0

0024

%25

%23

%25

%26

%25

%27

%27

%27

%29

%30

%29

%28

%>$

50,0

00–$

60,0

0024

%24

%22

%24

%25

%24

%25

%26

%26

%28

%29

%28

%27

%>$

60,0

00–$

70,0

0023

%24

%22

%23

%24

%23

%25

%25

%25

%27

%28

%27

%27

%>$

70,0

00–$

80,0

0026

%23

%22

%22

%23

%22

%24

%24

%24

%26

%27

%27

%26

%>$

80,0

00–$

90,0

0023

%23

%21

%21

%23

%21

%23

%23

%23

%25

%26

%26

%25

%>$

90,0

00–$

100,

000

22%

22%

21%

20%

22%

20%

23%

22%

22%

24%

26%

25%

25%

>$10

0,00

0–$2

00,0

0022

%20

%19

%18

%19

%18

%19

%19

%19

%21

%23

%23

%22

%>$

200,

000

18%

15%

13%

13%

13%

12%

13%

12%

12%

13%

15%

14%

14%

Sal

ary

Ran

ge$2

0,00

0–$4

0,00

018

%17

%13

%19

%20

%19

%24

%22

%25

%25

%21

%23

%22

%>$

40,0

00–$

60,0

0020

%23

%21

%26

%28

%27

%30

%26

%26

%28

%27

%28

%27

%>$

60,0

00–$

80,0

0018

%23

%20

%24

%24

%24

%26

%23

%22

%25

%22

%24

%23

%>$

80,0

00–$

100,

000

17%

21%

17%

22%

21%

20%

23%

20%

19%

21%

19%

21%

20%

>$10

0,00

014

%16

%13

%16

%14

%14

%16

%14

%14

%16

%15

%16

%15

%So

urce

: Tab

ulat

ions

from

EBR

I/IC

I Par

ticip

ant-D

irect

ed R

etire

men

t Pla

n D

ata

Col

lect

ion

Proj

ect.

Not

e: T

he te

nure

var

iabl

e is

gen

eral

ly y

ears

wor

king

at c

urre

nt e

mpl

oyer

, and

thus

may

ove

rsta

te y

ears

of p

artic

ipat

ion

in th

e 40

1(k)

pla

n.

Figu

re 4

8

Per

cent

age

of E

ligib

le 4

01(k

) Par

ticip

ants

With

401

(k) L

oans

, by

Par

ticip

ant A

ge, T

enur

e, A

ccou

nt S

ize,

or S

alar

y, S

elec

ted

Year

s

401(

k) L

oan

Act

ivit

y V

arie

d A

cro

ss 4

01(k

) P

lan

Par

tici

pan

ts


$6,717 $6,815$6,856$6,644 $6,659

$6,839 $6,946 $6,821

$7,292 $7,495$7,191 $7,346

$6,846$7,027 $7,153

$7,421$7,780

$7,982

$3,9

02 $4,4

00

$3,8

24

$3,6

59

$3,7

00

$3,8

32

$3,8

93

$3,6

61 $4,0

89

$4,1

67

$3,8

89

$3,9

72

$3,6

19

$3,7

85

$3,8

58

$3,9

73

$4,2

39

$4,3

59

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Average Median

Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project.Note: Average and median 401(k) loan amounts are calculated among participants with 401(k) loans at year-end.

Figure 49401(k) Loan Balances

Average and median loan balances for 401(k) participants with 401(k) loans, 1998–2015


1996 2000 2002 2005 2007 2008 2009 2010 2011 2012 2013 2014 2015All 16% 14% 16% 13% 12% 16% 15% 14% 14% 13% 12% 11% 12%Age Group

20s 30% 30% 28% 24% 25% 29% 26% 24% 26% 25% 26% 26% 25%30s 22% 20% 22% 19% 19% 25% 22% 20% 21% 20% 19% 18% 19%40s 16% 15% 16% 13% 13% 18% 16% 15% 16% 15% 13% 13% 13%50s 12% 11% 12% 10% 10% 13% 12% 11% 11% 11% 10% 9% 9%60s 10% 9% 10% 8% 8% 11% 10% 9% 9% 9% 8% 8% 8%

Tenure (years)0–2 27% 24% 27% 23% 21% 25% 22% 19% 21% 22% 17% 16% 19%>2–5 24% 25% 25% 21% 22% 26% 23% 20% 21% 21% 19% 18% 19%>5–10 23% 21% 23% 19% 18% 24% 20% 19% 20% 18% 17% 16% 16%>10–20 15% 14% 16% 13% 13% 17% 16% 14% 15% 14% 12% 12% 12%>20–30 11% 10% 11% 9% 8% 12% 11% 9% 10% 9% 8% 8% 7%>30 7% 8% 10% 8% 7% 9% 9% 7% 7% 7% 6% 6% 6%

Account Size<$10,000 39% 39% 37% 35% 36% 39% 39% 35% 37% 38% 41% 42% 38%$10,000–$20,000 32% 32% 31% 29% 30% 33% 31% 28% 30% 30% 31% 32% 31%>$20,000–$30,000 28% 28% 28% 25% 26% 29% 27% 25% 27% 26% 27% 28% 27%>$30,000–$40,000 23% 24% 25% 22% 23% 26% 25% 23% 24% 24% 24% 24% 24%>$40,000–$50,000 22% 21% 22% 20% 21% 24% 22% 20% 21% 21% 21% 21% 22%>$50,000–$60,000 19% 19% 20% 18% 19% 21% 21% 19% 19% 19% 19% 19% 20%>$60,000–$70,000 16% 17% 18% 16% 17% 19% 19% 17% 18% 17% 17% 17% 18%>$70,000–$80,000 16% 15% 16% 15% 16% 18% 17% 16% 16% 16% 16% 16% 16%>$80,000–$90,000 14% 14% 15% 14% 14% 16% 16% 15% 15% 15% 14% 14% 15%>$90,000–$100,000 13% 13% 13% 13% 13% 15% 15% 14% 14% 14% 13% 13% 13%>$100,000–$200,000 10% 9% 10% 9% 10% 11% 11% 10% 11% 10% 10% 10% 10%>$200,000 5% 5% 5% 4% 5% 5% 5% 5% 5% 5% 4% 4% 4%

Salary Range$20,000–40,000 17% 19% 18% 18% 17% 21% 19% 17% 17% 17% 16% 14% 15%>$40,000–$60,000 17% 16% 16% 16% 15% 19% 17% 15% 16% 15% 13% 12% 13%>$60,000–$80,000 15% 13% 14% 13% 12% 17% 14% 13% 13% 13% 11% 11% 12%>$80,000–$100,000 14% 12% 12% 11% 11% 14% 12% 11% 12% 11% 10% 10% 10%>$100,000 14% 10% 10% 9% 9% 11% 10% 9% 9% 9% 7% 7% 8%

Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project.Note: The tenure variable is generally years working at current employer, and thus may overstate years of participation in the 401(k) plan.

Figure 50401(k) Loan Amounts Varied Across 401(k) Participants

401(k) Loan Balances as a Percentage of 401(k) Plan Account Balances for Participants With Loans, by Participant Age, Tenure,

Account Size, or Salary, Selected Years

401(k) Loan as a Percentage of Remaining 401(k) PlanAccount Balance 20s 30s 40s 50s 60s AllZero 92% 81% 76% 79% 87% 82%1–10% 2% 5% 8% 9% 6% 7%>10%–20% 2% 4% 5% 5% 2% 4%>20–30% 1% 3% 3% 3% 1% 2%>30–80% 3% 6% 7% 4% 2% 5%>80% 0% 1% 1% 1% 0% 1%Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project.Components may not add to 100 percent because of rounding.

Figure 51Loans From 401(k) Plans Tended to Be Small

Percentage of eligible participants, by participant age, 2015

Age Group



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Endnotes

1 For data on 401(k) plan assets, participants, and plans through 2014, see U.S. Department of Labor, Employee Benefits

Security Administration 2016a and 2016b. For total retirement assets (including those in 401(k) plans) through the end of

2016, see Investment Company Institute 2017. For a discussion of trends between defined benefit (DB) and defined

contribution (DC) plans, see Poterba, Venti, and Wise 2007; Holden, Brady, and Hadley 2006; Brady and Bogdan 2010 and

2016; and Brady, Burham, and Holden 2012.

2 Before 2005, the U.S. Department of Labor private pension plan bulletins reported a count of active 401(k) plan participants

that had been adjusted from the number of active participants actually reported in the Form 5500 filings to exclude: (1)

individuals eligible to participate in a 401(k) plan who had not elected to have their employers make contributions; and (2)

nonvested former employees who had not (at the time the Form 5500 filings were submitted) incurred the break-in-service

period established by their plan (see U.S. Department of Labor, Employee Benefits Security Administration 2012a for further

detail). This change in methodology results in a dramatic increase in the number of individuals reported as active participants

in 401(k) plans; in 2004, the number of active participants increased to 53.1 million (new method) from 44.4 million (old

method; see U.S. Department of Labor, Employee Benefits Security Administration 2015d). As the U.S. Department of Labor

notes: “In a purely economic sense and for research purposes, individuals in these groups should not be included in the count

of active participants.” However, the form schedule needed to make the adjustment is no longer required. Using National

Compensation Survey data and historical relationships and trends evident in the Form 5500 data, EBRI and ICI estimate the

number of active 401(k) participants to be about 54 million in 2015 and the number of 401(k) plans to be about 550,000. The

estimate of the number of active 401(k) plan participants is based on a combination of data from U.S. Department of Labor,

Bureau of Labor Statistics 2012, 2013, 2014, 2015, and 2016; and U.S. Department of Labor, Employee Benefits Security

Administration 2012a, 2012b, 2012c, 2012d, 2012e, 2014, 2015a, 2015b, 2015c, and 2016a.

3 See Investment Company Institute 2017. At year-end 2016, 401(k) plans had $4.8 trillion in assets.

4 The Employee Benefit Research Institute (EBRI) is a nonprofit, nonpartisan, public policy research organization that does not

lobby or take positions on legislative proposals.

5 The Investment Company Institute (ICI) is the leading association representing regulated funds globally, including mutual

funds, exchange-traded funds (ETFs), closed-end funds, and unit investment trusts (UITs) in the United States, and similar

funds offered to investors in jurisdictions worldwide. ICI seeks to encourage adherence to high ethical standards, promote

public understanding, and otherwise advance the interests of funds, their shareholders, directors, and advisers. ICI’s members

manage total assets of U.S. $19.6 trillion in the United States, serving more than 95 million U.S. shareholders, and U.S. $5.6

trillion in assets in other jurisdictions. ICI carries out its international work through ICI Global, with offices in London, Hong

Kong, and Washington, DC.

6 This update extends previous findings from the project for 1996 through 2015. For year-end 2014 results, see Holden et al.

2016. Results for earlier years are available in earlier issues of ICI Research Perspective (www.ici.org/research/perspective)

and EBRI Issue Brief (www.ebri.org/publications/ib).

7 The EBRI/ICI 401(k) database environment is certified to be fully compliant with the ISO-27002 Information Security Audit

standard. Moreover, EBRI has obtained a legal opinion that the methodology used meets the privacy standards of the Gramm-

Leach-Bliley Act. At no time has any nonpublic personal information that is personally identifiable, such as a Social Security

number, been transferred to or shared with EBRI.

8 Account balances are net of unpaid loan balances. Thus, unpaid loan balances are not included in any of the eight asset

categories described.

9 The cross-sectional analysis for this publication found that consolidating the multiple accounts across a majority of the

providers to the single individual owning them resulted in an overall increase of 2.6 percent in the average 401(k) plan

account balance. This statistic should be interpreted with caution, as it may not represent the total 401(k) assets owned by

http://www.ici.org/research/perspective

http://www.ebri.org/publications/ib


the individual. The impact of account consolidation varied with the participant’s age and tenure with the current employer.

The largest increases in average account balance occurred among older participants with fewer years of tenure. For example,

among participants in their 60s with two or fewer years of tenure, the average account balance increased 7.3 percent with the

consolidation of their multiple accounts. Among participants in their 50s or 60s with more than 30 years of tenure, the

average account balance increased 2.0 percent with the consolidation of their multiple accounts. Future joint research with

this feature will explore the longitudinal aspects of this consolidation in more detail.

10 This system of classification does not consider the number of distinct investment options presented to a given participant,

but rather the types of options presented. Preliminary research analyzing 1.4 million participants drawn from the 2000

EBRI/ICI 401(k) database suggests that the sheer number of investment options presented does not influence participants.

On average, participants have 10.4 distinct options but, on average, choose only 2.5 (Holden and VanDerhei 2001b). In

addition, the preliminary analysis found that 401(k) participants are not naive—that is, when given n options, they do not

divide their assets among all n. Indeed, less than 1 percent of participants followed a 1/n asset allocation strategy. Plan

Sponsor Council of America 2016 indicates that in 2015, the average number of investment fund options available for

participant contributions was 19 among more than 600 plans surveyed. Deloitte Consulting LLP, International Foundation of

Employee Benefit Plans, and the International Society of Certified Employee Benefit Specialists 2015 reports that the average

number of funds offered by the nearly 400 401(k) plan sponsors surveyed was 22 in 2015. BrightScope and Investment

Company Institute 2016 reports an average of 28 investment options in 2014, and an average of 22 investment options when

a target-date fund suite is counted as a single investment option.

11 The asset allocation path that the target-date fund follows to shift its focus from growth to income over time is typically

referred to as the glide path. Because discussions of asset allocation usually focus on the percentage of the portfolio invested

in equities, the glide path generally reflects the declining percentage of equities in the portfolio as it approaches and passes

the target date, which is usually indicated in the fund’s name. The target date generally is the date at which the typical

investor for whom that fund is designed would reach retirement age and stop making new investments in the fund.

12 Lifestyle funds maintain a predetermined risk level and generally use words such as “conservative,” “moderate,” or

“aggressive” in their name to indicate the fund’s risk level. Lifestyle funds generally are included in the non–target-date

balanced fund category.

13 GICs are insurance company products that guarantee a specific rate of return on the invested capital over the life of the

contract.

14 Other stable-value funds include synthetic GICs, which consist of a portfolio of fixed-income securities “wrapped” with a

guarantee (typically by an insurance company or a bank) to provide benefit payments according to the plan at book value.

15 Some recordkeepers supplying data were unable to provide complete asset allocation detail on certain pooled asset classes

for one or more of their clients. The final EBRI/ICI 401(k) database includes only plans for which at least 90 percent of all plan

assets could be identified.

16 The average account balance is calculated for the 19.4 million 401(k) plan participants who had account balances at both

year-end 2014 and year-end 2015.

17 For 401(k) asset figures, see Investment Company Institute 2017.

18 Estimates of the number of 401(k) plans and active participants are based on a combination of data from U.S. Department

of Labor, Bureau of Labor Statistics, and U.S. Department of Labor, Employee Benefits Security Administration reports. See

discussion in note 2.

19 The latest available data from the U.S. Department of Labor are for plan year 2014 (see U.S. Department of Labor,

Employee Benefits Security Administration 2016a).


20 For an analysis of the changes in account balances of consistent participants in the EBRI/ICI 401(k) database in the wake of

the financial crisis (over the six-year period from year-end 2007 to year-end 2014), see Holden et al. 2016b.

21 Because of these changes in the cross sections, comparing average account balances across different year-end cross-

sectional snapshots can lead to false conclusions. For example, newly formed plans would tend to pull down the average

account balance, but would tell us nothing about consistently participating workers. Similarly, the aggregate average account

balance would tend to be pulled down if a large number of participants retired.

22 Tabulations of the Survey of Consumer Finances reveal that about half of traditional IRA assets in 2013 resulted from

rollovers from employer-sponsored retirement plans.

23 At year-end 2015, 2.0 percent of the participants in the database were missing a birth date entry, were younger than 20, or

were older than 69. They were not included in this analysis.

24 At year-end 2015, 10.3 percent of the participants in the database were missing a date of hire entry and were not included

in this analysis.

25 The positive correlation between tenure and account balance is expected because long-term employees have had more time

to accumulate an account balance. However, a rollover from a previous employer’s plan could interfere with this positive

correlation because a rollover could give a short-tenured employee a high account balance. There is some discernible evidence

of rollover assets among the participants with account balances greater than $100,000, as 3 percent of them had two or fewer

years of tenure, and 6 percent of them had between two and five years of tenure (see Figure 12).

26 Because 401(k) plans were introduced nearly 35 years ago, older and longer-tenured employees would not have

participated in 401(k) plans for their entire careers. The Revenue Act of 1978 contained a provision that became Internal

Revenue Code Section 401(k). The law went into effect on January 1, 1980, but it was not until November 1981 that proposed

regulations were issued (see Holden, Brady, and Hadley 2006; Employee Benefit Research Institute 2005; and U.S. Internal

Revenue Service 1981).

27 Low account balances among this group can be explained in two possible ways: (1) their employer’s 401(k) plan has only

recently been established (74 percent of all 401(k)-type plans in existence in 2014 were established after 1995 [tabulations of

U.S. Department of Labor Form 5500 data for 2014]), or (2) the employee only recently joined the plan (whether on his or her

own or through automatic enrollment). In either event, job tenure would not accurately reflect actual 401(k) plan

participation.

28 It is possible that these older, longer-tenured workers accumulated defined contribution (DC) plan assets (e.g., in a profit-

sharing plan) before the introduction of 401(k) plan features. However, such DC plan arrangements generally did not permit

employee contributions and often were designed to be supplemental to other employer plans. Participants’ account balances

that predate the 401(k) plan are not included in this analysis, which focuses on 401(k) balance amounts.

29 Social Security replaces a much higher fraction of preretirement earnings for lower-income workers. For example, the first-

year replacement rate (mean scheduled Social Security first-year benefits as a percentage of average inflation-indexed career

earnings for retired workers in the 1960–1969 birth cohort [individuals aged 47 to 56 in 2016]) decreased as income

increased. The mean replacement rate for the lowest lifetime household earnings quintile was 83 percent; for the middle

quintile, the mean Social Security replacement rate was 54 percent; and for the highest quintile, it was 34 percent. See

“Replacement Rate—Prices” in Congressional Budget Office 2016b. For additional discussion, see Brady and Bogdan 2016 and

Brady, Burham, and Holden 2012.

30 The ratio of 401(k) plan account balance (at the current employer) to salary alone is not an indicator of preparedness for

retirement, nor is it the only measure that can be used to judge retirement readiness or savings adequacy (see Brady,


Burham, and Holden 2012). A complete analysis of preparedness for retirement would require estimating projected balances

at retirement by also considering retirement income from Social Security, defined benefit plans, IRAs, and other DC plans,

possibly from previous employment (for example, see VanDerhei 2014). For references to other such research, see MacDonald

and Moore 2011 and Holden and VanDerhei 2005. For an analysis of the possible impact of automatic increases in participants’

contribution rates in automatic enrollment plans, see VanDerhei and Copeland 2008, VanDerhei 2010, and VanDerhei and

Lucas 2010. For a discussion of the variety of factors (e.g., taxes, savings, mortgages, children) that affect replacement rates,

see Brady 2010. For analysis of the impact of changes in Social Security on retirement patterns, see Gustman and Steinmeier

2008 and 2013. For a discussion of the variety of measures that can be used to evaluate Americans’ retirement readiness, see

Brady, Burham, and Holden 2012. For simulation results showing the contributions of employer-sponsored retirement plans

and Social Security to income in retirement, see Brady 2016. For an analysis of income near Social Security claiming, see

Brady et al. 2017.

31 The tendency of the account balance-to-salary ratio to peak at higher salary levels and then fall off likely reflects the

influence of two competing forces. First, empirical research suggests that higher earners tend to contribute

higher percentages of salary; therefore, one would expect the ratio of account balance to salary to rise with salary. However,

tax code contribution limits and nondiscrimination rules, which aim to ensure that employees of all income ranges attain the

benefits of the 401(k) plan, constrain the ability of high-income individuals to save in the plan. See Holden and VanDerhei

2001c for a complete discussion of EBRI/ICI findings and other research on the relationship between contribution rates and

salary. For an analysis of 401(k) participants’ contribution activity during the bear market of 2000 to 2002, see Holden and

VanDerhei 2004c. For summary statistics on contribution activity in 2015, see Utkus and Young 2016 and Aon 2016.

32 At year-end 2015, 59 percent of non–target-date balanced mutual fund assets were assumed to be invested in equities (see

Investment Company Institute, Quarterly Supplementary Data). Allocation to equities in target-date funds is assumed to vary

with investor age. Asset allocation to equities for target-date funds was based on Morningstar analysis of target-date fund

asset allocation (see Morningstar 2015 and note 39 for additional discussion).

33 Other research suggests that most 401(k) participants do not make active changes to their asset allocations during any

given year. For example, an ICI survey of recordkeepers covering more than 29 million DC plan participant accounts found

that 9.4 percent of DC plan participants changed the asset allocation of their account balances in 2016 and 5.6 percent

changed the asset allocation of their contributions during 2016 (see Holden and Schrass 2017). Analyzing 2015 data, Utkus

and Young 2016 reported that “only 9 [percent] of DC plan participants traded within their accounts,” and Utkus and Young

2017 reported that “only 8 [percent] of DC plan participants traded within their accounts.” Similarly, Utkus and Young 2012

reported that “only 11 [percent] of DC plan participants traded in their accounts” in 2011, down from 16 percent in 2008,

making it at that time “the lowest level observed” since they began tracking the data in 1999. Aon 2016 found that 14 percent

of participants traded in their accounts in 2015. Furthermore, Choi et al. 2001 found that 401(k) participants rarely made

changes after the initial point of enrollment. (For household survey results from fall 2016 reflecting households’ sentiment

toward and confidence in 401(k) plans, see Holden, Schrass, and Bogdan 2017.)

34 For the age distribution of 401(k) plan participants and assets at year-end 2015, see Figure 5.

35 See note 11 for additional detail on target-date funds.

36 See Figure 21 in Holden et al. 2016a (the year-end 2014 EBRI/ICI 401(k) database update).

37 For an analysis tracking target-date fund use and the persistence of their use from 2007 through 2009, see Copeland 2011.

For an analysis of target-date fund use among defaulted and non-defaulted 401(k) plan participants, see Mitchell and Utkus

2012.

38 Target-date funds often are used as the default investment in automatic enrollment plans and in plans’ investment lineups

(see Plan Sponsor Council of America 2016). At year-end 2015, 67 percent of target-date mutual fund assets were held in DC

plans (see Investment Company Institute 2017). Plan Sponsor Council of America 2016 reported an increase in the incidence


of automatic enrollment in 2015. Of the more than 600 plans surveyed, 57.5 percent had automatic enrollment in 2015,

compared with 52.4 percent in 2014, 39.6 percent in 2008, and 10.5 percent in 2004. Utkus and Young 2017 reports that

45 percent of DC plans in their recordkeeping system in 2016 offer automatic enrollment, up from 41 percent in 2015, and

36 percent in 2014.

39 At year-end 2015, 59 percent of non–target-date balanced fund assets were assumed to be invested in equities (see

Investment Company Institute, Quarterly Supplementary Data). The allocation to equities in target-date funds varies with the

funds’ target dates. For target-date funds, investors were assumed to be in a fund whose target date was nearest to their

65th birthday. The equity portion was estimated using the industry average equity percentage for the assigned target-date

fund calculated using the Morningstar Lifecycle Allocation Indexes (see Morningstar 2015). For the average 401(k) plan asset

allocation to equities (through equity funds, company stock, and the equity portion of balanced funds) by participant age, see

Figure 21.

40 For year-end 2014 data, see Holden et al. 2016a.

41 See Holden et al. 2008; Holden, VanDerhei, and Alonso 2009; Holden, VanDerhei, and Alonso 2010; and Holden et al. 2011,

2012, 2013, 2014, and 2016 for data for earlier years.

42 For year-end 1998 data, see Holden, VanDerhei, and Quick 2000.

43 In the database, 401(k) plan participants’ holdings of, and concentration in, company stock have tended to decline. In the

wake of the collapse of Enron in 2001, participants’ awareness of the need to diversify may have increased and some plan

sponsors may have changed plan design (see VanDerhei 2002). In addition, some of this movement may be the result of

regulations put in place by the Pension Protection Act of 2006 (PPA), which limited the length of time participants could be

required to hold company stock contributed to their accounts by their employer; specified rules regarding the notification of

blackout periods; and required quarterly statements that must include a notice highlighting the importance of diversification

(see U.S. Joint Committee on Taxation 2006).

44 Plan-specific information on loan provisions is available for the majority of the plans in the sample (including virtually all of

the small plans). Some plans without this information are classified as having a loan provision if any participant in the plan has

an outstanding loan balance. This may understate the number of plans offering loans (or participants eligible for loans)

because some plans may have offered a plan loan, but no participant had taken out a loan. It is likely that this omission is

small, as U.S. Government Accountability Office 1997 found that more than 95 percent of 401(k) plans that offer loans had at

least one plan participant with an outstanding loan.

45 For a complete time series of the percentage of eligible 401(k) participants with outstanding 401(k) loans and loan amounts

as a percentage of the remaining 401(k) plan account balance, see Holden et al. 2013.

46 The percentage of 401(k) participants with 401(k) loans outstanding across all participants both with and without 401(k)

plan loan access was similar in earlier years. For example, in 2014, this measure was 17 percent; from 2010 through 2013,

18 percent; in 2009, 19 percent; in 2008, 16 percent; in 2007, 16 percent; and in 2006, 15 percent.

47 In plan year 2014 (latest data available), only 1.5 percent of the $4.4 trillion in 401(k) plan assets were participant loans.

See Table D6 in U.S. Department of Labor, Employee Benefits Security Administration 2016a.

48 This pattern is driven in part by restrictions placed on loan amounts.

EBRI Employee Benefit Research Institute Issue Brief (ISSN 0887−137X) is published by the Employee Benefit Research Institute, 1100 13th St. NW, Suite 878, Washington, DC, 20005-4051, at $300 per year or is included as part of a membership subscription. Presorted standard postage rate paid in Dulles, VA. POSTMASTER: Send address changes to: EBRI Issue Brief, 1100 13th St. NW, Suite 878, Washington, DC, 20005-4051. Copyright 2017 by Employee Benefit Research Institute. All rights reserved. No. 436.

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